Inverted tax structure
Ravi KUMAR (34 Points)
23 October 2018
What is meant by ITC accumulated due to inverted tax structure
2 Replies
CA Mayur Todmal
(Practicing CA)
(7756 Points)
Replied 23 October 2018
ITC accumulated on account of inout tax rate is higher than output tax rate
Vinod Babu
(24191 Points)
Replied 23 October 2018
The term ‘Inverted Tax Structure’ refers to a situation where the rate of tax on input received (i.e. Input tax credit received) is more than the rate of tax (i.e. the tax paid) on output supplies. As a result, the higher tax paid on input supplies gets accumulated in the Electronic Credit Ledger of the receiver Taxpayer. The Taxpayer can claim the refund of ITC accumulated on account of Inverted Tax structure by filing the refund application form RFD-01A. (Refer Section 54(3) (ii) of the CGST Act 2017)
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