Refund allowed in case of inverted duty structure on account of Multiple Input having higher GST rate than output

Last updated: 11 November 2023

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Quick Summary

The Rajasthan High Court has ruled that businesses can claim a refund of unutilised Input Tax Credit (ITC) even when they use multiple inputs with higher GST rates than their output supplies. This decision clarifies the 'inverted duty structure' provision under the CGST Act. The court set aside previous rejections of refund claims, directing authorities to reconsider them based on this interpretation.

Court :
Rajasthan High Court (Jaipur Bench)

Brief :
The Hon'ble Rajasthan High Court (Jaipur Bench) in the case of M/s. Nahar Industrial Enterprises Limited v. Union of India [Civil Writ Petition No. 8476 of 20/21 dated October 31, 2023], allowed the Writ Petition and held that refund of Input Tax Credit ("ITC") can be claimed when there are multiple inputs having a higher rate of GST than the rate of GST on output supplies.

Citation :
Civil Writ Petition No. 8476 of 20/21 dated October 31, 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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