QUESTION

Inverted Turnover = 5,00,000/- Local Sale GST = 60000/- Zero Rated Turnover = 2,00,000/- Export under LUT Total Input = 300000 Output Gst = 60000 Please Explain what is Adjusted total turnover. We are manufacture and having Local sale @ 12% and Export Sale We claim Both Refund, 'Refund of ITC on Export of Goods & Services without Payment of Tax' and 'Refund on account of ITC accumulated due to Inverted Tax Structure'. Q.1 - We have to file 2 Separate Claim for one Period 1.Refund of ITC on Export of Goods & Services without Payment of Tax 2. Refund on account of ITC accumulated due to Inverted Tax Structure. Q2. We can claim the said refund in one refund claim.

ANSWER

Facts of the case:

Refund in case of Inverted tax Structure and Refund of ITC on Export under LUT.

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.

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

Adjusted Total Turnover means the sum total of the value of-
(a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and
(b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding-
   (i) the value of exempt supplies other than zero-rated supplies; and
  (ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any, during the relevant period.

SECTION 2 OF CGST ACT

(112) 'turnover in State' or 'turnover in Union territory' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Interpretation:

The formula for calculating refund amount is given in Rule 89 of CGST Rules as reproduced above.

Conclusion:
Adjusted total turnover for refund of inputs in case of Inverted tax structure is sum total of Inverted turnover and zero rated turnover i.e. 500000+60000+200000. Maximum refund amount = (500000 / 760000 * 300000) - 60000

Assuming that 60,000/- is the total output tax payable on inverted rated supply of goods or services.

Refund for Export without payment of tax and refund for inverted tax structure are two separate refund claims and cannot be claimed in one application. (Reply dt. 15/11/2021)