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Refund of Unutilized ITC

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Krishna Kumar Yadav

21 Points Posted on 10 May 2020

A Company is registered in different States under GST, having Branches in those States. The Company used to raise Invoices to their Branches (cross billing) by charging IGST. But, the outward Supply in those States is not so much that could utilize the ITC of IGST, being accumulated due to the "cross Billings" and huge amount is lying in "IGST Credit Ledger" being unutilized.

Now, the query is that - whether Refund of this unutilized ITC Credit of IGST can be taken under the GST Laws...?

Replies (2)

Quick Summary

A company registered across multiple states is accumulating unutilised IGST credit due to cross-billing between branches. The core question is whether this accumulated IGST credit can be refunded under GST laws. While direct refunds of input tax credit (ITC) are generally not permitted, options like transferring the credit to other locations or specific refund scenarios outlined in Section 54 of the CGST Act may apply.

Mohit Jagnani

Professional - CA firm

352 Points Posted on 10 May 2020

Hi,

under GST you cannot take refund of ITC . However you can very well transfer the credit to other location by following below:

1. raising service bill
2. Bill to Ship to model from client side

Thanks,
Mohit
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