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GOVERNMENT OF INDIA
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OFFICE OF THE SUPERINTENDENT OF CENTRAL EXCISE &GST,METTUR II RANGE, 1st Floor,Door No
5/199-A, Erattaipuliamarathur,Salem Main Road,RAMAN NAGAR,METTUR DAM 636403
Email:[email protected] Telephone No.04298-
230447
O.C.No. 231/2019 Date: 30.09.2019

To
The Assistant Commissioner of GST and Central Excise,
Salem - II Division,
Salem.

Sir,

Sub:GST – Refund of ITC for Rs.12,99,390/- accumulated due to inverted tax structure
filled by M/s Chiranjilal Spinners for the month of March, 2019 - Submission of
verification Report – Reg.

*************

Kind reference is invited to Assistant Commissioner’s C.No V/18/GST/52/96/2019 GST(RF) dt.

19.09.2019 on the above subject.

02. M/s. Chiranjilal Spinners, holders of GSTIN 33AAACC9085C1ZW, have filed refund
claim towards refund of ITC accumulated due to inverted tax structure which is governed by
sub-Section (3)(ii) of Section 54 of CGST Act, 2017 read with Rule 89 of CGST Rules, 2017, as
below :

Month / Refund Claimed as per GST RFD-01A

year
IGST CGST SGST TOTAL
March‘19 12,99,390 0 0 12,99,390

03. M/s. Chiranjilal Spinners are manufacturers and suppliers of Yarn and Woven fabrics of
Synthetic and Artificial Staple Fibres falling under Chapter Heading 5510,5509,5512, 5504 etc
and paying GST @ 12%. Their main Inputs on which they are availing Input Tax Credit are
falling under Chapters 5504, 5503 etc and availing credit @ 18%. The taxpayer has submitted
that they are filing refund claim for refund of ITC accumulated in their Electronic Credit Register
during the month of March, 2019, consequent to sale of their manufactured goods.

04. The tax payer has filed the refund claim in the common portal of GSTN by furnishing the
required details for refund of accumulated ITC vide the ARN Nos.AA330919035287V and
enclosed the said copy of ARN along with the refund claim filed

05. The verification report for the above refund claim is submitted below:

i) The supplier has filed the following documents/statements along with their claim
(a) Undertaking to the effect that the amount of refund sanctioned would be paid back to
the Government in case it is found subsequently that the requirement of clause(c) of
sub-section (2) of section 16 read with sub-section (2) of section 42 of the
CGST/SGST Act has not been complied with in respect of the amount refunded as per
circular No.24/24/2017 dated 21.12.2017.
 (b) FORM GST-RFD-01A, ARN Acknowledgement copy and Statement 1A in case of refund
claim arising due to inverted duty structure as per Circular No.24/24/2017 dated
21.12.2017.
(c) The electronic credit ledger of the amount debited claimed as refund in FORM GST
RFD-01A.
(d) Copy of Purchase & Sales invoices for the month for which refund is claimed.

06. On verification through common portal GST-ACES, it is seen that the supplier have filed
the GSTR-3B & GSTR-1 returns for the month for which the refund is claimed.

07. From the Statement 1A furnished by the supplier along with the Refund claim, it is seen
the value of inverted turnover shown in Statement 1 of GST-RFD-01A is Rs. 10,13,21,562.62/-
and tax paid on the same is tallying with figures furnished in Statement 1A.

08. Since there are no exports the question of inclusion of zero rated supplies, drawback
availment or claiming of refund on such exports does not arise for the tax payer. All sales are
domestic clearances on payment of appropriate GST.

09. The turnover of Rs.12,24,89,127.50/- shown in GSTR-3B is tallying with the turnover shown
in GSTR-1 and Col.3 of Statement 1 of form GST-RFD-01A i.e Adjusted total turnover.

10. The Statement 1A attached regarding the availed input tax credit of Rs.1,62,69,546.51/-
during the month of March 2019 is tallying with the net input tax credit shown in GST RFD1A
(Col.4). The actual uploaded input tax credit as per Statement 1A verified with the copies of
input tax credit documents amounts to Rs. 1,62,69,546.51/-. The total ITC availed shown in
GSTR3B of amount Rs. 1,67,84,797/- is differing with the Net input tax credit and Statement
1A. When enquired, the taxpayer has informed that capital goods were not included in Net ITC.
Based on the documents produced and RFD-01A the eligible refund amount is as shown:

Total turnover
Tax payable on Eligible refund of
Inverted rated (including other
Inverted rated Net input tax credit accumulated credit
turnover than inverted rated
goods due to inverted rate
goods)
10,13,21,562.62 1,21,58,587.51 12,24,89,127.5 1,62,69,546.51 12,99,390

Invoices not reflected GSTR 2A

Sl Taxable
No GSTIN Invoice No. Invoice Date Value IGST CGST SGST Total
1 24DENPP3449Q1ZM GT/13 23-01-2019 27,70,186 1,38,509.30 0 0 1,38,509.30
2 24DENPP3449Q1ZM GT/14 24-01-2019 27,67,767 1,38,388.35 0 0 1,38,388.35
3 24ACGPK5901J1ZQ IGT11 24-02-2019 27,16,230 1,35,811.50 0 0 1,35,811.50
4 24AAACG4464B2Z3 9191907077 26-02-2019 31,33,563 5,64,041 0 0 5,64,041.00
5 33ADGFS2845G2Z3 FIB-1842 26-02-2019 22,64,488.92 0 2,03,804 2,03,804 4,07,608.00
6 24AAACG4464B2Z3 9191907105 27-02-2019 32,14,915 5,78,685 0 0 5,78,685.00
7 24AAACG4464B2Z3 9191907121 27-02-2019 30,23,462 5,44,223 0 0 5,44,223.00
8 24AAACG4464B2Z3 9191907122 27-02-2019 80,886 14,559 0 0 14,559.00
9 24AAACG4464B2Z3 9191907123 27-02-2019 80,031 14,406 0 0 14,406.00
10 24ACGPK5901J1ZQ IGT12 27-02-2019 27,22,149 1,36,107.45 0 0 1,36,107.45
 22,64,730.60 203804 203804 26,72,338.60
11. On verification of the Statement 1A filed with RFD1A with the GSTR2A returns for March
2019 the credit availed on the following the input documents in Statement 1A is not reflected in
GSTR2A returns.

According to the circular No. 59/33/2018-GST as reproduced below, refund may be allowed to
such invoices, if otherwise eligible as the taxpayer has submitted hard copies of such invocies.

In view of the difficulties being faced by the claimants of refund, it has been decided that the refund claim shall be
accompanied by a print-out of FORM GSTR-2A of the claimant for the relevant period for which the refund is claimed. The
proper officer shall rely upon FORM GSTR-2A as an evidence of the accountal of the supply by the corresponding supplier
in relation to which the input tax credit has been availed by the claimant. It may be noted that there may be situations
in which FORM GSTR-2A may not contain the details of all the invoices relating to the input tax credit availed, possibly
because the supplier’s FORM GSTR-1 was delayed or not filed. In such situations, the proper officer may call for the
hard copies of such invoices if he deems it necessary for the examination of the claim for refund.

As the taxpayer has submitted the above 10 invoices which were not reflected in GSTR 2A has
been verified and to that extent the credit is eligible for refund purposes.

13. Further on verification of the copies of purchase invoices produced and comparing with the
Statement 1A of GST RFD1A it is observed that the taxpayer has availed ITC on input services to
the extent of Rs.18,598/-. The refund of accumulated credit cannot be provided to the
enclosed list of those input services (Annexure enclosed). So, the above amount is to be reduced
from the Net ITC claimed and so net ITC of only Rs. 1,62,50,949/- would be available.
Accordingly the formula is reworked and the eligible refund accumulated due to inverted rate
structure would be Rs. 12,64,946- as shown below:

Total turnover Eligible refund of

Tax payable (including other Net ITC accumulated
Inverted rated on Inverted than inverted available for credit due to
turnover rated goods rated goods) inputs inverted rate
1,62,50,949
10,13,21,563 1,21,58,588 12,24,89,128 12,84,006

13. The taxpayer has debited the amount of input tax credit of Rs. 12,99,390/- in the IGST
head from their electronic credit ledger on 17.09.2019 for claiming the same as refund. As
reported above Rs.12,84,006/- may be allowed as accumulated credit and the balance may be
re-credited to the taxpayer credit ledger as ineligible for refund or deficiency memo may be
issued to correct the discrepancy.

14. The correctness of the ARN Receipt submitted by the supplier has been verified through
Departmental portal of GST and found tallied.

15. The claim has been filed within the stipulated time period.

16. Regarding arrears of revenue pending recovery from the claimant, it is submitted that
there is no arrears amount pending recovery from the claimant, as on date.

17. The question of unjust enrichment does not arise as the supplier is claiming the refund of
ITC accumulated due to inverted tax structure.
 18. The refund claim is resubmitted herewith along with all enclosures for further necessary
action.

Yours faithfully,

Encl: As above
SUPERINTENDENT
METTUR - II RANGE

INPUT SERVICES CREDIT AVAILED FOR INVERTED RATE REFUND CLAIM

Sl Taxable
No GSTIN Invoice No. Invoice Date Value IGST CGST SGST Total
1 33AAACR3556P1Z2 IN1700010645 11-03-2019 25,450 0 2,290.50 2,290.50 4,581.00
2 33AUXPK6268M1ZP SBE4450/18-19 11-03-2019 13,700 0 1,233 1,233 2,466.00
3 33AAACT2153N1ZD ED181315 12-03-2019 9,300 0 837 837 1,674.00
4 33AAACL5244N1ZF 1191807346 14-03-2019 2,450 0 220.5 220.5 441.00
5 33AAACL5244N1ZF 1191807347 14-03-2019 2,701 0 243.09 243.09 486.18
6 33AAACL5244N1ZF 1191807348 14-03-2019 3,240 0 291.6 291.6 583.20
7 33AAACR3556P1Z2 IN1700010696 14-03-2019 14,238 0 1,281.42 1,281.42 2,562.84
8 33AAACT2153N1ZD PC180671 14-03-2019 3,016 0 271.44 271.44 542.88
9 33AUXPK6268M1ZP SBE4521/18-19 16-03-2019 1,300 0 78 78 156.00
10 33AAACZ0484C1ZO TN9801912645 16-03-2019 3,960.20 0 356.42 356.42 712.84
11 29AABCE3907E1ZV 1819-15662 18-03-2019 1,350 243 0 0 243.00
12 33AAACR5055K1ZE 33114 22-03-2019 3,600 0 324 324 648.00
13 33AAACV2809D1ZT I18221064564 26-03-2019 19,450 0 1,750.50 1,750.50 3,501.00
Total 243 9,177.47 9,177.47 18,597.94