Itc refund for e commerce sellers

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Tarun Mittal (Querist)

14 January 2019 Many E Commerce Sellers have already accumulated huge Input credits due to 18% GST on commission charged by ecommerce operators. Can they claim refund of ITC as it includes ITC of Goods, Commission & Others services and Fixed Assets purchased by them (They are buying/selling goods in 5% category).
Kindly suggest refund procedure.

CA Anita Bhadra

CA Anita Bhadra (Expert)

14 January 2019 As per section 54(3) of the CGST Act, there are 2 specified instances for claiming refunds . These are :-

(a) Zero rated supplies made without payment of tax (i.e. export of goods/services under LUT or supply of goods/services to an SEZ unit).

(b) Outward supplies under Inverted Rate Structure.

Not all persons are eligible to claim refund of unutilised input tax credit under inverted rate structure

ITC accumulated on account of GST paid on capital goods and input services will not be eligible for refund.

In my view , e commerce seller can not claim refund for unutilised credit for accumulated on payment of commission

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Tarun Mittal

Tarun Mittal (Querist)

15 January 2019 As the case, it may belongs to the condition of inverted tax structure.
Let's take an example
Selling goods having Taxable Value 100 Rs (GST 5%)
E-Commerce Selling and Distribution charges attributable to the sale will be 30% of the Sale Value(Approximately)
10 Rs will be the margin for the seller, 60 Rs will be the cost.

So, GST output Rs 5
GST input of goods Rs 3
GST Input of Services Rs. 5.4

So. Net ITC Available will be Rs. 3.4 per 100
It will only accumulates. So, this conditions only happens in case of inverted tax structure.

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