Refund Guidelines for Unutilized ITC Under GST: Section 54(3) & Rule 89 Explained with Amendments and Cases

The provisions and guidelines for the refund of unutilized Input Tax Credit (ITC) under the Goods and Services Tax (GST) due to an inverted tax structure, as per Section 54(3) of the CGST Act and Rule 89. Refunds are allowed when zero-rated supplies are made without tax payment or when input tax rates exceed output tax rates. However, refunds are restricted when suppliers claim drawbacks or export duties apply. The document details the electronic refund process, necessary documentation, and the formula for refund computation. It also addresses specific scenarios and clarifications regarding refund eligibility, including significant amendments and relevant case laws.

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