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Inverted duty structure.

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Dhana Sai

193 Points Posted on 21 July 2020

cememt - 28%
iron- 18%.

if my supplier supplier has sold both cement and iron as a single supply(i.e mixed supply ) then my input rate will be 28%

if i sold iron it would attract 18%. so can i apply refund u/s 54(3).

Replies (4)

Quick Summary

This discussion clarifies the 'inverted duty structure' where the tax rate on inputs is higher than on output supplies. It explores the possibility of claiming a refund for unutilised Input Tax Credit (ITC) under Section 54(3) when a supplier provides mixed supplies like cement (28%) and iron (18%). However, it also outlines key exceptions where ITC refunds are not permitted, such as nil-rated or exempt supplies, exported goods subject to export duty, or when the supplier claims output tax refunds or duty drawbacks.

chethan data

198 Points Posted on 21 July 2020

Yes possible on this transaction

Pankaj Rawat

GST Practitioner

29904 Points Posted on 21 July 2020

No...... you cannot claim refund under IDS

chethan data

198 Points Posted on 22 July 2020

Dhana sai sir are you input service distribution or not

Maryam Hasan Meem

Student

196 Points Posted on 22 July 2020

A Registered Person may claim a Refund of Unutilized ITC on account of INVERTED DUTY STRUCTURE at the end of any tax period

where the Credit has Accumulated on account of RATE of tax on Inputs being Higher Than the rate of tax on Output Supplies.

EXCEPTIONS where Refund Of Unutilized INPUT TAX CREDIT shall NOT be allowed in these cases

Output supplies are nil rated or fully exempt supplies EXCEPT supplies of Goods Or Services or both as may be Notified by the Government on the recommendations of the Council.

If the GOODS Exported out of India are subject to export duty.

If supplier claims Refund Of Output Tax paid under IGST Act.

If the supplier avails Duty Drawback or refund of IGST on such supplies.