Priyanka Refineries Private Limited Vs Deputy Commissioner (ST) (Andhra Pradesh High Court)
Andhra Pradesh High Court held that notification no. 9 of 2022, Central Tax (Rate) is effective only from 18.07.2022 and hence refund on account of inverted duty structure is admissible for period prior to 18.07.2022 and restricted for period after 18.07.2022.
Facts- The petitioners are engaged in the business of manufacturing, distributing and branding of edible oils and specialty fats in India. In the process of the manufacture of these products, the petitioners had sourced various raw materials on which GST had already been paid. It so transpired that the rate of GST payable on edible oils and specialty fats was lower than the rate of tax levied on the inputs or raw materials sourced by the petitioner.
Section 5 (3) of the CGST Act provides for a situation where the input tax credit available in the ledger of a registered person can be refunded, if the rate of tax on the final product is lower than the rate of tax payable on the inputs used for manufacture of such a final product. This system is popularly known as ‘inverted duty structure’.
The petitioners, on the ground that their products fall into the category of inverted duty structure, had filed applications for refund of the input tax credit, under Section 54 of the CGST Act, for the periods prior to 18.07.2022. However, the refund claim was rejected.
