The term ‘Inverted Tax Structure’ refers to a situation where the rate of tax on input received (i.e. Input tax credit received) is more than the rate of tax (i.e. the tax paid) on output supplies. As a result, the higher tax paid on input supplies gets accumulated in the Electronic Credit Ledger of the receiver Taxpayer. The Taxpayer can claim the refund of ITC accumulated on account of Inverted Tax structure by filing the refund application form RFD-01A. (Refer Section 54(3) (ii) of the CGST Act 2017)
You can file for refund of IGST / CGST / SGST on account of ITC accumulated due to Inverted Tax Structure, if you have filed GSTR1 and GSTR-3B of the relevant tax period, for which refund is to be claimed.
However, in case registered persons having aggregate turnover of up to Rs1.5 crores in the preceding financial year or the current financial year are opting to file FORM GSTR-1 quarterly (notification No. 57/2017-Central Tax dated 15.11.2017 refers), such persons shall apply for refund on a quarterly basis. Please note that such refund on account of inverted tax structure is not available in case of exempted or nil rated supplies.
If the Taxpayer has filed GSTR1 and GSTR-3B, then he / she need not file GSTR-2 and GSTR-3 for filing refund form RFD-01A. Presently GSTR-2 and GSTR- 3 are deferred, hence for the reason taxpayer has to give manual undertaking to the jurisdictional authority (Refer circular no 24/24/2017-GST dated 21/12/2017 for details)
Yes, as per Explanation 2 (e) of subsection 14 of Section-54, the refund application in form RFD-01A needs to be filed within 2 years from the end of financial year in which such claim for refund arises
Yes, the refund amount will be credited to one of the bank accounts that you registered in the GST Portal and linked it with your GST profile. At the time of filling-out form RFD-01A, you will be required to select a bank account from the list of your linked / registered accounts in the GST Portal. In case the applicant requires receipt of refund in a different bank account, he may add that bank account in GST registration details by way of non-core amendment.
Net ITC is the input tax credit availed on inputs and input services during the relevant period.
The value of inverted supply of goods made during the relevant period without payment of tax under bond or letter of undertaking
The tax amount payable on such inverted rated supply of goods under the same head i.e. IGST, CGST, SGST.
Adjusted total turnover is the turnover in a State or a Union territory, as defined under clause (112) of section 2 of CGST Act, excluding the value of exempt supplies other than inverted-rated supplies, during the relevant period
The refund application must be saved before filing.
After clicking on Proceed button no changes can be made in the refund application.
A debit entry shall be made in the Electronic Credit Ledger for the amount claimed as Refund after ARN is generated on submission of the refund application.