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Question ID : 36975

refund-inverted tax structure (pl. not consider que id 36973 and 36974)

Purchasing SS patta which is coverted into utensils through jobwork. SS Patta charged 18%, selling utensils-12%. we are also purchasing & selling ss utensils-12%. As all ss utensils purchased & manufactured are sold from common stock it is difficult to separate sales of manufactured & purchased utensils. Department is denying the refund for Ss utensils Net ITC which is purchased by way of finished product. Circular No. 79/53/2018-GST -31/12/18 issued in which point 4a mentioned - Where there are multiple inputs attracting different rates, in the formula provided in rule 89(5) of the CGST Rules, Net ITC covers ITC availed on all inputs irrespective of their rate of tax. Departmental officer denied that ss utensils purchased is not input under inverted tax structure. Rule 89(5) Max. Refund Amount = {(T/o invertedrated) x Net ITC ÷ Adj.TotalT/o} - tax on inverted rated supply). We are eligible for refund by considering the NET ITC of all input availed.If we take all the sales (mfg & trading) under inverted sales then tax on all sales should be reduced as per formula, net ITC should include for all input as per formula. Means as per formula given by rules refund for trading items of finished product is nullified. As tax on inverted sales @12% is reduced from Net ITC which also include tax on finished product@12%. we correct or not?

posted by Viral Shah on Feb 11 2019 12:00AM

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