Rule 89(5) GST Refund Formula Changed w.e.f 01.07.2017
Rule 89 of CGST Rules 2017 explain Application for refund of tax, interest, penalty, fees or any other amount
As per Notification No 26/2018 Central Tax Dated 13.06.2018 : CGST (Fifth Amendment) Rules 2018
with effect from 01st July, 2017, in rule 89, for sub-rule (5), the following shall be substituted, namely:-
“(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-
Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods and services.
Explanation:- For the purposes of this sub-rule, the expressions –
(a) Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and
(b) Adjusted Total turnover shall have the same meaning as assigned to it in sub-rule (4).”
Comment : Thus Rule 89(5) is Changed w.e.f 01.07.2017 and not w.e.f 18.04.2018
Before the above Change Rule 89 (5) of CGST Rules 2017 [ Substituted by the Central Goods and Services Tax (Fourth Amendment) Rules, 2018, w.e.f. 18-4-2018 ] was as follow
[ (5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:—
Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) × Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods and services.
Explanation:—For the purposes of this sub-rule, the expressions—
(a) | “Net ITC” shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rule (4A) or (4B) or both; and | |
(b) | “Adjusted Total turnover” shall have the same meaning as assigned to it in sub-rule (4). ] |