Refund of accumulated ITC - Reg.

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Discussion is about whether a proprietor can claim refund of accumulated ITC arising from RCM paid on rent during business inactivity. Despite filing NIL returns and active registration, clarification given is that refund of such accumulated ITC is generally not allowed under GST provisions.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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30 March 2026 Sir,

One of my friend is doing a proprietary business ( supply of service). Due to some personal reasons, he could not carry out his business for a few months. However, he promptly filed NIL return and his Registration is still active. But, as his place of business is located in a rented premises, he had paid the RCM regularly and that amount has accumulated in the Credit ledger.
It might take a few more months for him to revive his business actively.
Now, can he claim refund of his accumulated RCM? If so, what is the proceedure.

Kindly advice.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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30 March 2026 No, refund of accumulated ITC arising from RCM is generally not allowed in your friend’s situation.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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03 April 2026 Thank you very much Sir.

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