Logistics business Services Refund can we Received 100%

This query is : Resolved

ARCHANA (Querist)
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07 May 2025 Sir/Mam,

Logistics Business comes under services He Claimed ITC Refund but it is rejected and his CA Told only 10% receives Refund.

Plz Explain how to received Full Refund of ITC (in Logistics Business) what are the rules to claim ITC Refund

Thanking you,

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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12 August 2025 Why was only 10% refund allowed?
GST law provides a blocked credit calculation for refund on inputs and input services when there is a mix of taxable and exempt supplies.

For some services (like transportation/logistics), the government has specified the proportion of input tax credit eligible for refund is limited (like 10% or 5% etc.) because a part of their supplies may be exempt or non-GST.

Can 100% ITC refund be claimed?
To claim full (100%) ITC refund, these conditions must be met:

The supplies must be fully taxable and zero-rated.

If you provide only taxable supplies (including zero-rated exports), and no exempt supplies, full ITC refund is possible.

Proper documentation and compliance:

Invoice matching, GST returns, and input tax credit records must be clean.

No blocked credits:

ITC related to blocked items like motor vehicles for personal use, etc., cannot be claimed.

Key sections and rules related to ITC Refund:
Section 54 of CGST Act — Refund of tax, including ITC.

Notification No. 1/2017 - CGST — Details of blocked credits.

Circulars by CBIC — Clarifications on refund of ITC for different sectors.

What can you do practically?
Check if all your inputs and services are directly linked to taxable output services (like freight charged to customers with GST).

If your logistics business includes any exempt supplies, you must calculate ITC proportionately.

If you have zero-rated exports under logistics, you can claim a full refund on inputs used for those supplies.

Consult your CA to file refund claims with detailed breakup and proof of usage.

Summary:
Full 100% ITC refund is possible only if your entire supply is taxable or zero-rated and no exempt supplies are involved. Otherwise, refund is restricted proportionately.

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