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Refund on Inverted duty structure - Goods and Services Tax - GSTExtract A foreign company( F) and an indian company( D) together formed a consortium to execute a govt works contract services ( client-C). D imports materials from F and supplies them to C on cost basis with no value addition . D has to pay IGST on Import @ 18% and bills to Client on behalf of F(as F does not have any GST Regn) as per the Agreement on milestone basis @ 12%. So it ia case of Inverted duty structure and D is supposed to get Refund. The fact is as per Agreement entered between consortium and client ,selling price of D to F is fixed as below: say cost of material to D(import price) = 100(mat cost)+5(BCD) = 105 . GST paid on RCM basis on 105=18.90.(available as ITC). D has to sell the goods as it is to client(C) at ₹ 100(inclusive of GST). So effectively B is seeling it as a cost of ₹ 89.29(100/112*100). , tax charged to C=10.71. So D is selling goods to C at a loss and claiming credit from the Dept of Refund of ₹ 8.19(18.90-10.71). . query: wheather there will be any problem for grant of refund under inverted rate to D ?
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