Subject: Clarification on refund related issues
Attention is invited to sub-section (3) of section 54 of GGST Act, 2017, which provides for the refund of unutilized input tax credit in cases where credit is accumulated on account of rate of tax of inputs being higher than the rate of tax on output supplies i.e. on account of inverted duty structure. Sub-rule (5) of rule 89 of GGST Rules, 2017 prescribes the formula for grant of refund in cases of inverted duty structure. Vide Notification No. 14/2022-State Tax dated 16/07/2022, amendment has been made in the formula prescribed under sub-rule (5) of rule 89 of the GGST Rules, 2017. Further, vide Notification No. 09/2022-State Tax (Rate) dated 16/07/2022, which has been made effective from 18/07/2022, the 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.
2. Representations have been received from the trade and the field formations seeking clarification on various issues pertaining to the implementation of the above notifications. In order to clarify the issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Chief Commissioner of State tax, in exercise of its powers conferred by section 168 of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as "GGST Act"), hereby clarifies the issues as under:
1.
2.
The restriction imposed vide Notification No. 09/2022-State Tax (Rate) dated 16/07/2022 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. Accordingly, it is clarified that the restriction imposed by the said notification would be applicable in respect of all refund applications filed on or after 18/07/2022, and would not apply to the refund applications filed before 18/07/2022.
3. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Chief Commissioner of States tax.
(Milind Torawane)
Chief Commissioner of State Tax,
Gujarat State, Ahmedabad