GST Refund is allowed for ITC accumulated on account of the different tax rates on inward supplies

Last updated: 06 January 2024

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The Delhi High Court has ruled that Indian Oil Corporation Limited is entitled to a refund of accumulated Input Tax Credit (ITC). This ruling applies even when the principal input and output supplies have the same tax rate, provided other inward supplies have different tax rates. The court found that the GST refund cannot be denied based on Circular No. 135/5/2020-GST, which previously restricted such claims.

Court :
Delhi High Court

Brief :
The Hon'ble Delhi High Court in the case of Indian Oil Corporation Limited v. Commissioner of Central Goods and Services Tax & Ors. [W.P.(C) 10222/2023 & CM No. 39561/2023] held that the Petitioner is entitled to the refund of accumulated ITC on account of the different tax rates on inward supplies, the same cannot be denied by virtue of Circular No. 135/5/2020-GST dated March 31,2020, issued under Section 168(1) of the Central Goods and Service Tax Act, 2017 ("the CGST Act"). Referring to paragraph 3.2 of the said Circular, a refund of accumulated ITC was not available, where the input and output supplies were the same, however, this ground stands virtually abandoned in the present case as the Petitioner seeks to be distinguished on the basis that though tax rates on the principle input supply and output supply is the same, the rate chargeable on other input supplies are different. Hence, the present petition is allowed.

Citation :
W.P.(C) 10222/2023 & CM No. 39561/2023

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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