Quick Summary
CBIC videCircular No. 181/13/2022-GST dated November 10, 2022has issued a clarification on refund-related issues under GST Law. The Official Clarification by CBIC is as follows Attention is invited to sub-section (3) of section 54 of CGST Act, 2017, which provides for the refund of unutilized input tax credit in cases where credit is accumulated on account of rate of tax of inputs being higher than the rate of tax on output supplies i.e. on account of inverted duty structure. Sub-rule (5)
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FAQ :
The circular clarifies refund-related issues under the GST Law, particularly concerning unutilised input tax credit in cases of an inverted duty structure, to ensure uniform implementation of the law.
The amended formula, introduced by Notification No. 14/2022-Central Tax, applies only to refund applications filed on or after 5th July 2022. Applications filed before this date will be processed using the previous formula.
Yes, Notification No. 09/2022-Central Tax (Rate), effective from 18th July 2022, places restrictions on the refund of unutilised input tax credit for certain goods falling under chapters 15 and 27.
No, the restriction imposed by Notification No. 09/2022-Central Tax (Rate) applies prospectively only to refund applications filed on or after 18th July 2022.
An inverted duty structure occurs when the tax rate on inputs (materials used to produce goods or services) is higher than the tax rate on the final output supplies.
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