CAN REFUND APPLICATION FOR INVERTED DUTY STRUCTURE FILE YEARLY ,IF YES THEN WHAT IS THE DUE DATE TO FILE IT?

Reply—The term ‘Inverted Tax Structure’ refers to a situation where the rate of tax on inputs is more than the rate of tax on output supplies. As a result, the higher tax paid on inputs gets accumulated in the Electronic Credit Ledger of the taxpayer. The taxpayer can claim the refund of ITC accumulated on account of Inverted Tax structure by filing the refund application form RFD-01.

Under section 54(1) any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed.

 “Relevant date” means in the case of refund of unutilized input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises.

Statement 1A need to be uploaded mandatorily with the details of inward and outward documents for which refund is to be claimed. In terms of Rule 89(5) of CGST Rules, refund on account of capital goods and input services under refund of Inverted duty structure is not admissible.

It is not required to file yearly.