CBIC disallows the refund of compensation cess in case of inverted duty structure for tobacco and manufactured tobacco substitutes vide Notification No. 3/2019-Compensation Cess (Rate) dated 30th September, 2019.
Refund of Compensation Cess under inverted duty structure
No refund of unutilised ITC of compensation cess would be allowed in case of Tobacco and manufactured tobacco substitutes (Chapter 24), where the credit has accJumulated on account of rate of compensation cess on inputs being higher than the rate of compensation cess on the output supplies of such goods (other than nil rated or fully exempt supplies).
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 3/2019-Compensation Cess (Rate)
New Delhi, the 30th September, 2019
G.S.R. 708(E).- In exercise of the powers conferred by clause (ii) of the proviso to sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with sub-section (2) of Section 9 of the Goods and Services Tax (Compensation to States) Act, 2017, the Central Government, on the recommendations of the Council, hereby notifies the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, heading, sub-heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, in respect of which no refund of unutilised input tax credit of compensation cess shall be allowed, where the credit has accumulated on account of rate of compensation cess on inputs being higher than the rate of compensation cess on the output supplies of such goods (other than nil rated or fully exempt supplies).
TABLE
| S. No. | Tariff item, heading, subheading or Chapter | Description of Goods |
| (1) | (2) | (3) |
| 1. | 24 | Tobacco and manufactured tobacco substitutes |
Explanation. –
(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.
[F.No.354/131/2019-TRU]
(Ruchi Bisht)
Under Secretary to the Government of India
Very nice knowledgeable platform…