CBIC issues clarification for Inverted Duty Structure

Circular No. 181/13/2022-GST dated November 10th, 2022

Recently, the CBIC has amended formula for grant of refund in cases of inverted duty structure and restriction has been placed on refund of unutilised input tax credit on account of inverted duty structure in case of supply of certain goods falling under chapter 15 and 27. The CBIC has received several requests to provide clarification on the implementation of the above changes.

Now, the CBIC has issued circular to clarify that the said amended formula under sub-rule (5) of rule 89 of the CGST Rules, 2017 for calculation of refund of input tax credit on account of inverted duty structure would be applicable in respect of refund applications filed on or after 05.07.2022. It is also clarified that the restriction imposed vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022 on refund of unutilised input tax credit on account of inverted duty structure in case of specified goods falling under chapter 15 and 27 would apply prospectively only.

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