Circular, 2022

Text

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ry _. To, Office of the Commissioner, State Tax, Uttar Pradesh (GST Section) Lucknow: Dated: 25° November, 2022 All Zonal Additional Commissioner, Grade -1,.

Additional Commissioner Grade -2.:(S.LB.) * State Tax, Uttar Pradesh.

Subject: Clarification op refund related issues-reg.

* Attention: is invited to sub- section (3) of section 54 of UPGST ‘Act, 2017, which provides for the refund of unutilized input tax credit in cases where credit is accumulated on account of rate-of tax of inputs being higher than the rate of tax on output supplies i.e. on account of inverted duty structure. Sub-rule (5) of rule 89 of UPGST Rules, 2017 prescribes the formula for grant of refund in’ cases of inverted duty structure. Vide Notification No. ~ amendment has been made in the formula prescribed under sub-rule (5) of rule 89 of the UPGST Rules, 2017. Further, vide Notification No. 626/XI-2-22-9(47)/17-T.C:194-UP.Act- 1-2017-Order-(244)-2022 dated 18.07.2022, which has been made effective from 18.07.2022,. the restriction has'been placed on-refund of unutilised input tax credit on account of inverted duty structure in case of supply of certain goods falling under r chapter 15. and 27.

2. Representations have been received from the trade and the field formations seeking clarification on various issues pertaining to the implementation of the above notifications, In order to clarify the issues and to. ensure uniformity in the implementation of the provisions: ‘of law across the field formations, Commissioner, in exercise of its powers conferred by section 168 of the’ Uttar Pradesh Goods and Services Tax Act, 2017. (hereinafter referred to. as “UPGST Act”), hereby clarifies the issues as under:

Ts. No. Issue , Clarification 1, Whether the formula prescribed | Vide Notification. No. | 1009/X1-2-22- ; under sub-rule (5) of rule 89 of the | 9(47)/17-T.C.61-U.P.GST. Rules-2017- UPGST Rules,..2017 for. calculation | Order-(255)-2022 ‘Datéd” 17.11.2022, of refund. of unutilised input: tax | amendment has been made in: sub-rule. (5) of credit on account of -inverted duty } rule 89 of UPGST. Rules, 2017, modifying structure, as amended _vide | the formula prescribed therein. The-:said Says Page. ofe . | age.1 of 3 whe Notification No. 1009/XI-2-22- -9(47V/17-T.C.61-U.P.GST _ Rules- 2017-Order-(255)-2022 Dated 17.11.2022, will apply only to the 05.07.2022, or whether the same will also apply in respect of the refund and pending with the proper officer as on 05.07.2022? applications filed before 05.07.2022 | amendment is not clarificatory in nature and is applicable prospectively with effect from 05.07.2022. Accordingly, it is clarified that the said amended formula under sub-rule (5) refund applications filed on or after | of tule 89 of the UPGST Rules, 2017 for calculation of refund of input tax credit on account of inverted duty structure would be applicable in respect of refund applications filed on or after 05.07.2022. The refund applications filed before 05.07.2022 will be dealt as per the formula as it existed before the amendment’ made vide Notification No.

Rules-2017-Order-(255)-2022 Dated

2. Whether the restriction placed on | Vide Notification No. | .626/X]-2-22- on account of inverted duty structure in case of certain goods falling under chapter 15 and 27 vide Notification No. 626/XI-2-22-9(47)/17-T.C.194- dated 18.07.2022; which has been made. effective from 18.07.2022, would apply to. the applications pending as. on 18.07.2022 also or whether the same will apply only to. the refund 18.07.2022 or whether the same will be applicable only to refunds pertaining ( | periods? to prospective — tax refund of unutilised input tax credit | 9(47)/ 17-T.C.194-U.P.Act-1-2017-Order- (244)-2022. dated 18.07.2022, under the powers conferred by clause (ii) of the first proviso to sub-section (3) of section 54 of the UPGST Act, 2017, certain goods falling under chapter 15 and 27 have. been specified in respect of. which “no. refund | of unutilised input tax credit shal! be allowed, refund | where.. the. credit has accumulated’ on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such specified goods (other than nil rated or applications filed on or after fully exempt supplies). The said notification has come into force with effect. from The ‘restriction’ imposed vide Notification

No... 626/XI-2-22-9(47)/17-T.C.194-U.P.

Act-1-2017-Order-(244)-2022, © dated 18.07.2022 on refund of unutilised input tax credit on account of. inverted duty ‘structure ‘in case of specified goods falling under ‘chapter 15 and 27 would — apply prospectively ~ only. Accordingly, it is clarified that the restriction imposed by the said notification would be applicable in ‘respect of all refund applications filed on or after 18,07.2022, and would not apply to. the refund applications filed before 18.07.2022.

3. ‘Tt is requested that suitable trade notices niay be issued to publicize the contents of this Circular.

4, Difficulty if any, in the implementation of this circular may be brought to the notice of the Undersigned.

By Order, | wn ete Copy To:

1. Joint Commissioner (1.T.), State Tax HQ, Lucknow for uploading the Circular on the Departmental Website. en we ore State Tax HQ, Lucknow.

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Provisions this circular answers to

Read out of the instrument itself: an enabling provision is one it says it was made under, which is the power it rests on. The rest it names without resting on.

Other instruments under the same Act

All of the The Uttar Pradesh Goods and Services Tax Act, 2017