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Difference between purchase GST and sale GST

uma shankar (proprietor) (140 Points)

17 June 2022

Scraps purchased from Govt. auction, contents are Iron, Copper, Alluminium, Silver , cables etc, GST @ 18% is charged. We shortout materials and sale charging applicable GST Rate. In case of Silver GST is @ 3%. On Sale of Silver we Charge GST @ 3%. Now GST authorities are asking that you have taken ITC @ 18% and on sale charging @ 3% So pay us Balance @ 15%. IS it as per any Rule ? Which Rule empowers them to ask for this refund ? Please Guide us ? Why should we pay back this 15% amount ?

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5 Replies

CA Raj Doshi (Practising CA) (8924 Points)
Replied 18 June 2022

I think you are doing correctly. It is a case of inverted duty structure. The detailed written submission should help you.

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uma shankar (proprietor) (140 Points)
Replied 18 June 2022

Dear Doshi Sir,

Thanks for reply.

My querry is about the demand of GST authorities. Are they Right ? If NO , Then what we should reply them ?

Please Guide.

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 19 June 2022

Demand of GST is not correct. Your purchase is inverted duty structure purchase, so you can claim refund for balance .

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uma shankar (proprietor) (140 Points)
Replied 19 June 2022

Thanks Madam. Please clearify this Inverted duty structure is applicable only in case of a manufacturing units Or also applicable in our case of Trading ? We do not requre Refund because overaall our output GST is more than ITC.