refund of inverted duty structure under gst

refund of inverted duty structure under gst

Refund of inverted duty structure under Goods and Services Tax Act 2017 there is a provision when a person paid GST more than his GST liability for a certain period such person can cliam refund application. If a taxpayer whose refund is due should file refunded application whithin a particular time period.

invrted duty

When can the refund be claimed

There are many case where GST refund can be claim by taxpayer some are given below

1. ITC accumulated  due to inverted duty structure under gst

2. Excess payment of GST  by error or ommission

3. Export of Goods or Services

4. Purchases made by UN bodies or embassy’s

5.ITC accumulated

Inverted duty structure mean  GST tax rate is higher on input and lower on outward supply.

Example: X purchase goods  @18% GST rate while GST rate on sale product applicable only @ 5%

GST rate 18%

Less:GST rate 5%

Difference 13% is  inverted duty

In the invertd duty structure government refund on those taxpayer whose ITC accumulated  due to goods item only

GST refund not allowable   on ITC which accumulated  due to

Capital Goods

Services availed

This is totally unfair with taxpayer

A  ecommerce platforms  user seller availed service more than 60% of  total goods purchased


Mr. X is  use Amazon Platforms  to sale his product

If he purchases his goods Rs.1,00,000

He also availed Amazon service Rs. 60,000 or more

in such case mr. x has accumalted ITC but he  could not calim GST refund.

It is unjustfy with taxpayer who avail services both person are taxpayer but one enjoy refund facility but other cannot do so although both are GST paid.

Gujarat high court allows refund on services ITC but  Madars high court denial

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