GSTN conducted ‘GST-n-You Contest 2020’from 15th September 2020 till 15th October 2020 wherein entries were invited on the various recent initiatives and reforms on GST.
This video was selected for the 2nd Prize #4 (4 nos.) having Cash Prize of Rs. 50,000/- each.
Made by: Ms. Hensi Shah
Topic: Basic Concepts of Refund: Inverted Duty Structure
Duration: 1:59 minutes
Video Disclaimer:
Commodities eligible/ not eligible for IDS refund are subject to change as per later Notifications.
General Disclaimer:
This content has been created by the participants of GST-n-You Contest, organized by GSTN. GSTN has uploaded it for the benefit of taxpayers. GSTN has assessed them solely in terms of creativity and originality and they are meant for general guidance purposes only. Information contained therein can’t be cited in a Court of Law or during any quasi-judicial proceedings, as reference.
Let’s discuss what is: The refund of ITC due to inverted duty structure?
(Refer to image) When rate of tax on input tax credit
Is higher than rate of output tax liability and ITC has been accumulated due to this uneven structure, then unutilized ITC shall be available as a refund in cash.
Please note that GST law restricts the refund for ITC of capital goods and input service
Let’s discuss about the Restrictions- (Refer to image)
On inward side, refunds shall be available for inputs only and not for the capital goods and input service. On outward side, supply shall be any supply except it must not be exempt or nil rated supply or supply as notified by the government.
Time period of applying of applying for refund is 2 years from the date of filing the return. If the tax payers wants to apply for a refund for the period September 2020, then he can apply for it till 20th October 2022. That is two years from the due date of furnishing the return.
Let’s discuss the formula for the maximum refund available.
(Refer to the image)
{(Turnover for the Inverted Rate of Supply for the goods and services / adjusted total turnover)* net ITC} - tax payable on inverted rated supply of goods and services.
After placing the figures in formula, maximum refund available shall be Rs.13
The same shall be enchashed within 60 days from the date of application as per GST law
Detailed references are available here: (refer to image)
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Please watch: "Recent enhancements on GST portal to simplify and improve the return filing process"
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