refund of capital goods under inverted duty, Goods and Services Tax - GST

[satbir singhwahi]

Sir

department has paid refund for inverted duty structure for july 17, which includes refund on capital goods. How to rectify in books .Pls guide the procedure.

Posts / Replies

[satbir singhwahi]

Sir

pls guide

[Yash Jain]

Sir,

First of all inverted duty refund should be taken only against raw material/stores used in production of such goods. Refund of ITC paid on capital goods is generally a risky play.

As for books it's simple, reverse the cost of machine and book refund income to the extent of depreciation taken on ITC in FY 2017-18. - This option if ITC is capitalized

Reverse the Input tax credit to the extent of refund received (Refer your ECL, the amount is reversed on date of refund application) - This must be standing in your reconciliation if you have not passed the entry of reversal - This option if ITC is availed

Regards