Refund of ITC of Service

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Aj Style

Student

243 Points Posted on 23 October 2024

I am manufacturer of toys and sell good through e-commerce,

Sell goods at 5 and 12% gst rate

Purchase Raw material @ 18%

I have multiple state Gst and Amazon commission invoice ITC is accumulating in other gstin.

Can we claim refund of Amazon commission ITC or is there any way to transfer the ITC from other state to Delhi where I am paying gst
please guide because as I have to pay gst in delhi after having so much itc in other gstin

Replies (2)

Quick Summary

This discussion addresses a toy manufacturer's query about refunding accumulated GST Input Tax Credit (ITC) on services, particularly Amazon commissions, and transferring ITC between states. While direct transfer of ITC between states isn't possible, and ITC on services like e-commerce commissions isn't refundable under an inverted duty structure, the manufacturer can claim a refund for ITC on input goods if their output GST rates are lower than input rates. Accumulated service ITC can be used against liabilities in the respective states, and cross-utilization is possible within the same state. An Input Service Distributor (ISD) registration might be beneficial for managing ITC across multiple states.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 23 October 2024

You want to know if you can claim a refund of Amazon commission ITC or transfer the ITC from other states to Delhi.

1. Amazon commission ITC refund: You can claim a refund of Amazon commission ITC, but it will be a tedious process. You'll need to file a refund application (Form GST RFD-01) and provide detailed documentation, including invoices, payment receipts, and a letter from Amazon confirming the commission charges.

2. ITC transfer: Transferring ITC from one state to another is not possible. However, you can utilize the accumulated ITC in the respective states for payments or adjust it against your liabilities in those states.

3. Cross-utilization of ITC: If you have multiple GST registrations within the same state, you can cross-utilize the ITC across those registrations.

4. ISD (Input Service Distributor) registration: If you have offices or branches in multiple states, consider obtaining an ISD registration. This will allow you to distribute ITC to your various registrations.

Remember to maintain accurate records and documentation to support your claims and applications.

Aashok Kumar Sharma

Finance/Compliance Consultant

75663 Points Posted on 08 November 2026

Inverted duty refund for a toy manufacturer:
• Under Sec 54(3)(ii), refund of accumulated ITC due to an inverted duty structure is allowed only for ITC on inputs (goods). ITC on input services (e.g. e-commerce commissions, logistics) and capital goods is excluded (Rule 89(5), upheld in VKC Footsteps, SC 2021).
• So if your outputs are at 5% and 12%, and raw materials at 18%, you can claim a refund of the input ITC proportionately (formula). Service ITC isn't refundable. It accumulates.
• E-commerce sales: the ECO collects TCS (Sec 52), which credits your cash ledger. That can be refunded or used.