Refund of input services/capital goods on account of inverted duty structure is not admissible in terms of Section 54(3) read with Rule 89(5) of the CGST Act/Rules, 2017.
Section 54 of the CGST Act, 2017 — Refund — The appellant filed the application for refund in respect of unutilized ITC of Rs. 10,61,774/- for the month of August, 2018, on account of ITC accumulated due to Inverted Tax Structure. Out of which Rs. 4,52,056/- has been sanctioned and Rs. 6,09,718/- has been rejected. Further, the appellant has also filed application for refund in respect of unutilized ITC of Rs. 19,88,667/- for the month of March, 2019 on account of ITC accumulated due to Inverted Tax Structure. Out of which Rs. 9,94,498/- has been sanctioned and Rs. 9,94,169/- has been rejected. The adjudicating authority vide O-I-O (GST-RFD-06) rejected the refund on account of input services which is not admissible as per Rule 89(5) and Capital Goods, which is not included in the Net ITC. Being aggrieved with the impugned Orders, the appellant has filed the appeal. The authority observed that refund of input services/capital goods on account of inverted duty structure is not admissible in terms of Section 54(3) read with Rule 89(5). As such there is no infirmity in the rejection of refund claim on the ground of time bar issue.
Held that:- The Hon’ble authority rejected the appeal filed by the appellant.
Refund of input services/capital goods on account of inverted duty structure is not admissible in terms of Section 54(3) read with Rule 89(5) of the CGST Act/Rules, 2017.
Section 54 of the CGST Act, 2017 — Refund — The appellant filed the application for refund in respect of unutilized ITC of Rs. 10,61,774/- for the month of August, 2018, on account of ITC accumulated due to Inverted Tax Structure. Out of which Rs. 4,52,056/- has been sanctioned and Rs. 6,09,718/- has been rejected. Further, the appellant has also filed application for refund in respect of unutilized ITC of Rs. 19,88,667/- for the month of March, 2019 on account of ITC accumulated due to Inverted Tax Structure. Out of which Rs. 9,94,498/- has been sanctioned and Rs. 9,94,169/- has been rejected. The adjudicating authority vide O-I-O (GST-RFD-06) rejected the refund on account of input services which is not admissible as per Rule 89(5) and Capital Goods, which is not included in the Net ITC. Being aggrieved with the impugned Orders, the appellant has filed the appeal. The authority observed that refund of input services/capital goods on account of inverted duty structure is not admissible in terms of Section 54(3) read with Rule 89(5). As such there is no infirmity in the rejection of refund claim on the ground of time bar issue.
Held that:- The Hon’ble authority rejected the appeal filed by the appellant.