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Inverted GST structure refund

277 views 3 replies

Sakthivel K

GST / Accountant

143 Points Joined October 2014

for a manufacturing unit

ITC rawmaterial cotton/cotton waste purch.is 5%
ITC on raw material cotton yarn purch. is 5%
ITC on raw material viscose yarn purch is 12%
ITC on m/cry spares purch is 18%

GST on sales of viscose fabric is 5%
GST on sales of Cotton fabric is 5%
GST on sales of manufactured CottonYarn is 5%

how to calculate the refund amount under inverted duty structure..

in the formula

net ITC means....
adjusted total turnover means...

please clarify

Replies (3)

Pankaj Rawat

GST Practitioner

55067 Points Joined June 2017

As per Section 54(3) & R/w Circular 79/53/2018 : Net ITC covers the ITC availed on all Inputs in the relevant period , irrespective of their Rate of Tax ., hence Net will include all inward supplies for 5%+5%+12%
Formula :
Maximum Refund Amount = {(Turnover of inverted rated supply of goods & servicea) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods

Adjusted Total turnover” means the turnover in a State excluding the value of exempt supplies other than zero-rated supplies, during the relevant period;