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Refund for readymade textiles

lokesh K R (Accountent) (61 Points)

28 July 2020

we are manufacturer of readymade garments and we supplied with in India and we have excess input Gst in credit ledger, so can we able to claim GST refund on inverted tax structure please advise me Sir

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2 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 28 July 2020

Inverted Tax Structure' refers to a situation where the rate of tax on inputs purchased (i.e.GST Rate paid on inputs received) is more than the rate of tax on outward supplies/finished goods (i.e. GST Rate Payable on outward supplies).

In most types of readymade garment output (Clothes) is at higher GST rate as compared to GST rate on material/input. So, the refund benifit is not available

but if in your case GST rate on material is more than Readymade garment than, you can claim Refund , otherwise it's not available.

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Bhavika Kothari (CA) (1258 Points)
Replied 30 July 2020

Refund can be taken on inverted tax structure only if tax rate of inputs is more than tax rate of output. If this is the case with you then you can file refund form and take the refund