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2018 (12) TMI 1838 - Commissioner - GSTRefund of accumulated ITC - rate of tax on inputs being higher than the rate of the output supplies - adjudicating authority has rejected part refund by observing that in case of inverted duty structure, the input tax credit pertaining to only such inputs, the rate of tax on which is higher than the rate of tax on output supplies, would be permissible to be put into the formula for calculating refund in case of inverted duty structure - whether while calculating the inverted rate refund claim under Section 54 of CGST Act net ITC will be taken after deduction of inverted rate purchase or otherwise? HELD THAT:- Sub-rule 5 of Rule 89 of Central Goods & Services Tax Rules, 2017 has given the formula for calculating the matter to refund on account of inverted duty structure - Net ITC has been specifically defined in the rule, which states that input tax credit availed on input during the relevant period other than input tax credit pertain to zero-rated supply mentioned in Rule 89 of 4A & 4B. The adjudicating authority, on his own has travelled beyond the clarification as prescribed in the statute. The adjudicating authority should have relied on the “exact wording” of the statute under consideration - the adjudicating authority has wrongly deducted ITC of the same and lower tax rate availed by the appellants and agree to the arguments placed forward by the latter - Appeal allowed - decided in favor of appellant.
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