QUESTION  
 

WE ARE FILLING REFUND O UNUTILISED ITC UNDER INVERTED TAX STRUCTURE FOR THE FIRST TIME PLEASE TELL US WHAT AMOUNT OF INPUT AND OUTPUT WE SHOULD FILL IN FORM S01A WHETHER IT IS COMPLETE AMOUNT OF GSTR 2A AND GSTR-1 OR IT SHOULD BE THE AMOUNT ONLY FOR WHICH WE ARE APPLYING FOR ITC CLAIM. PLEASE GUIDE  

ANSWER  
 

Facts of the case: While filing refund of unutilized ITC under Inverted Tax Structure, what amount of input and output should be filed in Form.

Law Applicable: 

CGST RULE 89

(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" and "relevant period" shall have the same meaning as assigned to them in sub-rule (4) 

Interpretation: In case of Inverted Tax Structure amount of refund is to be calculated as per the formula given in Rule 89 reproduced above wherein  

"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" 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.

Further the intention of law is to allow refund of ITC availed on Inputs, i.e. opening stock or purchases used. It nowhere uses the word 'only purchases' during the relevant period.

Therefore ITC of opening stock will be added and ITC of closing stock will be deducted in the calculation of the amount of credit availed during the period.  

Conclusion: The refund amount in case of Inverted Tax structure  is to be calculated as per the formula given in Rule 89 wherein input tax credit availed on inputs during the relevant period is to be taken into consideration and not the credit of Capital Goods(Reply dt.03.12.2020)