CBIC allows Refund of accumulated credit on account of inverted duty structure to fabric manufacturers vide Notification No. 20/2018-Central Tax (Rate), Dated: 26th July, 2018.
Fabrics attract GST at the rate of 5% subject to the condition that refund of accumulated ITC on account of inversion will not be allowed. However, considering the difficulty faced by the Fabric sector on account of this condition, CBIC has allowed refund to fabrics on account of inverted duty structure. The refund of accumulated ITC shall be allowed with effect from 27th of July, 2018.
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi
Notification No. 20/2018-Central Tax (Rate), Dated: 26th July, 2018
G.S.R. 694(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), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 5/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 677(E), dated the 28th June, 2017, namely:-
In the said notification, in the opening paragraph the following proviso shall be inserted, namely:-
“Provided that,-
(i) nothing contained in this notification shall apply to the input tax credit accumulated on supplies received on or after the 1st day of August, 2018, in respect of goods mentioned at serial numbers 1, 2, 3, 4, 5, 6, 6A, 6B, 6C and 7 of the Table below; and
(ii) in respect of said goods, the accumulated input tax credit lying unutilised in balance, after payment of tax for and upto the month of July, 2018, on the inward supplies received up to the 31st day of July 2018, shall lapse.”.
2. This notification shall come into force with effect from 27th of July, 2018.
[F.No.354/ 255 /2018-TRU]
(Gunjan Kumar Verma)
Under Secretary to the Government of India
Note: – The principal notification No. 5/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 677(E), dated the 28th June, 2017 and last amended vide notification No. 44/2017-Central Tax(Rate) dated the 14th November, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1390(E), dated the 14th November, 2017.
Sir,
What are the Implications and Interpretations of the Notification No.20/2018,Central Tax-Rates dated 26/07/18?