Refund of ITC accumulated due to Inverted Tax Structure (RFD-01A)

What are the steps to file for refund of ITC accumulated due to Inverted Tax Structure, on the GST Portal?

To file for refund of ITC accumulated on account of Inverted Tax Structure, perform the following steps on the GST Portal:

1. Access the GST Portal. The GST Home page is displayed.

2. Navigate to the Services > Refunds > Application for Refund option. The Select the refund type page is displayed.

3. Select the Refund on account of ITC accumulated due to Inverted Tax Structure radio button.

4. Select the tax period (year and month) for which the refund application needs to be filed.

5. Click the CREATE button corresponding to your selected refund type.

6. In the Table Computation of refund to be Claimed (Statement 1), perform the following steps:

a. In column-1 (Turnover of inverted rated supply of goods), enter the turnover of inverted rated supply of goods by referring to column-3.1(a) of the Form GSTR-3B. The figure in column-1 is currently not pre- populated.

b. In column-2 (Tax payable on such inverted rated supply of goods), enter the tax payable on such inverted rated supply of goods under the four major heads – IGST, CGST, SGST / UTGST, and CESS.

c. In column-3 (Adjusted total turnover), enter the adjusted total turnover.

d. In column-4 (Net input tax credit), enter the Net Input Tax credit figures for the major heads – IGST, CGST, SGST / UTGST, and CESS separately. The figures of Net Input Tax Credit (ITC) in column-4 may be taken from column-4(C) of the Form GSTR-3B respectively. These figures are currently not pre- populated

Notes:

Maximum refund amount will be determined by using the formula given in rule 89(4) of the CGST / SGST / UTGST rules.

The formula for calculating refund on account of ITC accumulated due to Inverted Tax Structure is:

Refund Amount = (Turnover of inverted rated supply of goods X Net input tax credit / Adjusted total turnover) – Tax payable on such inverted rated supply of goods

In this formula:

(A) “Refund amount” means the maximum refund that is admissible.

(B) “Net ITC” means input tax credit availed on inputs and input services during the relevant period

(C) “Turnover of inverted rated supply of goods” means the value of inverted supply of goods made during the relevant period without payment of tax under bond or letter of undertaking

(D) “Tax payable on such inverted rated supply of goods” means tax payable on such inverted rated supply of goods under the same head i.e. IGST, CGST, SGST.

(E) “Adjusted Total turnover” means 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

(F) “Relevant period” means the period for which the claim has been filed.

The Refund Amount will be auto-calculated based on the above formula.

7. After filling the appropriate figures in table for Computation of Refund to be claimed (Statement 1), the refund amounts will get auto-populated for all the four major heads, in the “Amount Eligible for Refund” Table.

Notes:

  • The values as computed in the Amount eligible for Refund table are:
    • In column “Values as per Statement 1”, the amounts are pulled from column-5 of the Computation of Refund to be claimed (Statement-1) table.
    • In column “Balance in Electronic Credit Ledger”, the amounts are pulled from the current ITC ledger (Matched ITC).
    • In column “Tax Credit Availed during the period”, the amounts are pulled from ITC ledger, as the total of ITC availed in that period for which Refund is being claimed.
    • In column “Eligible amount”, the figures are auto populated for the corresponding major heads.
  • “Eligible Refund Amount to be claimed” will be the lowest of all of the following:
    • Formula value of refund amount as per Computation of Refund to be claimed (Statement 1)
    • ITC ledger balance as on date (Matched / Confirmed ITC)
    • ITC availed for the return period mentioned in refund application
  • Please enter the same turnover of inverted rated supply of goods (Column 1) under all the major heads – IGST, CGST, SGST / UTGST, and CESS.
  • Please enter the same adjusted total turnover (Column 3) under all the major heads – IGST, CGST, SGST / UTGST, and CESS.

8. Once all the details are entered and calculations are done, your refund amounts under all the major heads will appear in the Refund Claimed table.

9. Select the Bank Account Number from the drop-down list.

Notes:

  • The bank accounts displayed in the drop-down are those accounts that were provided during GST registration.
  • The Taxpayer must select a bank account from the drop-down list in order to receive refund.

10. Click Save to upload your entered refund details to the GST Portal.

Notes:

  • The refund application must be saved before filing.
  • The system will flash a confirmation message when saving the application for the first time.
  • The system displays a confirmation message upon saving the application.
  • Application can be saved at any stage and can be retrieved using the My Saved / Submitted Applications option under Refunds.
  • Saved applications are stored in the system for 15 days, after which they get deleted automatically.
  • Saving the application activates the Proceed button.

11. Select the declaration checkbox.

12. Click the PROCEED button.

13. Select the Verification checkbox.

14. In the Name of Authorized Signatory drop- down list, select the name of authorized signatory.

15. Click either Submit with DSC or Submit with EVC option.

Notes:

In Case of DSC:

  • Click the PROCEED button.
  • Select the certificate and click the SIGN button.

In Case of EVC:

Enter the OTP sent to email and mobile phone number of the authorized signatory registered in the GST Portal, and click the VERIFY button.

16. A success message is displayed, and the status is changed to Submitted. The Application Reference Number (ARN)receipt is downloaded.

17. Open the Refund ARN Receipt downloaded as a PDF document.

18. The Refund ARN Receipt is displayed.

Once Application Reference Number (ARN) is generated, take a print of Application and submit to the Jurisdictional Authority manually along with other relied upon documents as required under RFD-01.

Note: A debit entry shall be made in the Electronic Credit Ledger for the amount claimed as Refund in the Refund Claim Matrix.

Navigate to Services > Ledgers > Electronic Credit Ledger.

The Electronic Credit Ledger is displayed.

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2 responses to “How to claim GST refund of ITC accumulated due to Inverted Tax Structure”

  1. Rakesh says:

    sir i need a help for refund the electronic credit ledger in my gst portal

  2. C L RAVIKUMAR says:

    Sir,
    How to claim the credit carry forwarded from pre gst – VAT input tax credit balance availed through TRAN-1 Application. There is no taxable turnover details available. the carry forwarded has been duly credited to credit ledger in GST portal. Till now the balance credit available in gst portal. kindly advise to claim the refund of excess credit.

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