CBIC issues clarification on GST refund claim under inverted duty structure
Central Board of Indirect Taxes & Customs (CBIC) has issued Circular No. 173_05_2022 dated 6th July, 2022 to provide clarification on issue of claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification.
In Circular No.135/05/2020-GST dated 31.03.2020 in para 3.2 it was clarified that refund on account of inverted duty structure would not be admissible in cases where the input and output supply are same. The intent of para 3.2 of Circular No. 135/05/2020-GST dated 31.03.2020 was not to cover those cases where the supplier is making supply of goods under a concessional notification and the rate of tax of output supply is less than the rate of tax on input supply (of the same goods) at the same point of time due to supply of goods by the supplier under such concessional notification.
Therefore, it is clarified that in such cases, refund of accumulated input tax credit on account of inverted structure would be allowed in cases where accumulation of input tax credit is on account of rate of tax on outward supply being less than the rate of tax on inputs (same goods) at the same point of time, as per some concessional notification issued by the Government providing for lower rate of tax for some specified supplies.
