GST REFUND OF INVERTED DUTY

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This query is : Resolved

manoj patel (Querist)

29 July 2022 I want to claim refund of GST credit ledger balance due to inverted duty structure for last 2 year , before claiming of refund ITC lapse & payment of interest there on for July 2017 to July 2018 is compulsory.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

07 July 2024 To claim a refund of GST credit ledger balance due to inverted duty structure for the last two years (assuming you are referring to the financial years mentioned), you need to follow specific steps regarding the lapse of input tax credit (ITC) and payment of interest, especially for the period from July 2017 to July 2018. Here’s a detailed outline of what you need to consider:

### 1. **Lapse of Input Tax Credit (ITC):**
- **Previous Financial Years:** Before claiming a refund for the mentioned financial years , any unutilized ITC from preceding tax periods should ideally be lapsed or utilized for payment of GST liabilities or other eligible purposes.
- Ensure that you have utilized or let lapse any ITC accumulated due to inverted duty structure for the periods before 2019-20, as per GST rules.

### 2. **Payment of Interest:**
- **Interest Liability:** As per GST rules, if there is any delay in claiming the refund, interest may be applicable on the unutilized ITC from the period July 2017 to July 2018. Interest is typically calculated from the due date of filing GSTR-3B for the relevant tax period until the date of refund.
- Ensure that any interest liability related to the ITC for the period July 2017 to July 2018 is paid before filing the refund application for the subsequent periods

### 3. **Filing the Refund Application:**
- Use GST Form RFD-01 to file for refund of the accumulated ITC due to inverted duty structure for the financial years 2019-20 and 2020-21.
- Ensure all details in the application are accurate and supported by necessary documentation, including invoices showing payment of GST on inputs and GST paid on outward supplies.

### 4. **Verification and Processing:**
- Once the refund application is filed, the GST authorities will verify the application and supporting documents.
- If everything is in order, the refund amount will be processed and credited to your bank account.

### 5. **Professional Assistance:**
- If you are unsure about the process or have complex situations regarding ITC accumulation and refund, it’s advisable to seek assistance from a GST practitioner or tax consultant.
- They can help ensure compliance with GST regulations, proper documentation, and timely filing of the refund application.

By following these steps, including lapsing of ITC and payment of any applicable interest for the period from July 2017 to July 2018, you can effectively claim a refund of GST credit ledger balance due to inverted duty structure for the mentioned financial years. This approach ensures compliance with GST rules and facilitates a smooth refund process.

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