GST refund of inverted duty structure
Rule 89 (5) of CGST Rules prescribe formula for refund on account of inverted duty structure,
Old formula of GST refund on account of inverted duty structure
Application for refund of tax, interest, penalty, fees or any other amount
In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula –
Maximum Refund Amount = {(Turnover of inverted rated supply of goods) × Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods
Explanation.—For the purposes of this sub-rule, the expressions “Net ITC” and “Adjusted Total turnover” shall have the same meanings as assigned to them in sub-rule (4).
New formula of GST refund on account of inverted duty structure
However as per Notification No 21/2018 Central Tax Dated 18th April 2018
Rule 89 (5) substituted :-
“(5). In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-
Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services)
x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of
goods and services.
Explanation:- For the purposes of this sub-rule, the expressions –
(a) “Net ITC” shall mean input tax credit availed on inputs during the relevant period
other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and
(b) “Adjusted Total turnover” shall have the same meaning as assigned to it in sub-rule
(4).”;
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