Pounraj Ganesan
Quick Summary
Introduction The Goods and Services Tax (GST) was introduced in India on July 1, 2017, as a comprehensive, multi-stage, destination-based tax that replaced a complex web of indirect taxes previously levied by the central and state governments. GST aims to create a single, unified market to streamli
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
An Inverted Duty Structure arises when the GST rate on inputs (raw materials or components) is higher than the GST rate on the finished products. This means businesses pay more tax on inputs than they collect on outputs, leading to accumulated Input Tax Credit (ITC).
Input Tax Credit (ITC) is a mechanism under GST that allows businesses to offset the tax paid on inputs (inward supplies) against the tax payable on outputs (outward supplies). It ensures tax is paid only on the value added at each stage.
Yes, the GST law permits a refund of unutilised ITC under the Inverted Duty Structure, as outlined in Section 54 of the CGST Act. This is applicable when the rate of tax on inputs is higher than the rate of tax on output supplies.
To claim a refund, businesses must file Form RFD-01 on the GST portal within 2 years from the due date of the relevant tax period. GSTR-1 and GSTR-3B returns must be filed for the period, and specific statements within Form GST RFD-01A need to be completed.
Yes, certain goods and services are restricted from claiming refunds under the Inverted Duty Structure, as notified by the government. Taxpayers must verify these notifications based on the HSN of their outward supplies before applying for a refund.
CAclubindia
