Home Case Index All Cases GST GST + Commissioner GST - 2020 (10) TMI Commissioner This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 890 - Commissioner - GSTRefund of GST - inverted tax structure - adjudicating authority had noticed that the appellant had wrongly taken Net ITC in RFD-01 which included ineligible ITC of Capital Goods - Allegation that the appellant has suppressed/mis-declared value of Net ITC resulting in excess claim of refund - Section 54 (3) of the CGST Act, 2017 - Refund under the provisions of “receipt under deemed export” - penalty - HELD THAT:- Refund of unutilized ITC in case of inverted tax structure, as provided in Section 54 (3) of the CGST Act, 2017 is available where ITC remains unutilized even after setting off of available ITC for the payment of output tax liability. Where there are multiple inputs attracting different rate of tax, in the formula provided in Rule 89 (5) of the CGST Rules, the term ‘Net ITC’ cover the ITC availed on all inputs in the relevant period, irrespective of their rate of tax. Further, as per Para -14 of Circular No.79/53/2018-GST dated 31.12.2019 Section 54 (3) of the CGST Act provides that refund of any unutilized ITC may be claimed where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies). Further, Section 2 (59) of the CGST Act defines inputs as any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. Thus, inputs do not include services or capital goods. Therefore, clearly, the intent of the law is not to allow refund of tax paid on input services or capital goods as part of refund of unutilized input tax credit. Accordingly, in order to align the CGST Rules with the CGST Act, notification No.26/2018-Central Tax, dated 13.06.2018 was issued wherein it was stated that the term Net ITC, as used in the formula for calculating the maximum refund amount under rule 89 (5) of the CGST Rules, 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. Thus, both the law and the related rules clearly prevent the refund of tax paid on Input Services and Capital Goods as part of refund or Input Tax Credit accumulated on account of Inverted Duty Structure - appellant’s contention that credit of Capital Goods along with Input Services also be included for the purpose of determination of Net ITC is not correct and rightly rejected by the adjudicating authority. Refund under the provisions of “receipt under deemed export” - HELD THAT:- The appellant was at his liberty to claim the refund under relevant provision of the law and he should have filed the claim under relevant provisions related to deemed export scheme. It can not be allowed at this stage, as there is no such provision under the rules, therefore appellant’s demand can not be acceded and rightly rejected by the adjudicating authority - there are no force in the contention of the appellant and are not acceptable - appeal dismissed. Penalty proposed under Section 122 (1) of the Act - Scope of SCN - HELD THAT:- Adjudicating Authority can not travel beyond the scope of show cause notice. Any order passed by the adjudicating authority beyond the scope of show cause notice is not legal and liable to be set aside. Therefore, the penalty imposed under Section 122 (2) (b) is beyond the scope of show cause notice and is set aside. Appeal disposed off.
|