Q. Accumulated ITC refund

Question

Can a refund of ITC accumulated due to operational losses be claimed?

Answer 1

The GST law primarily allows the refund of accumulated ITC in cases where the output is zero-rated (exports) or in case of inverted duty structure (where the rate of tax on inputs is higher than that on outputs). The law does not explicitly provide for a refund of ITC accumulated solely due to operational losses. Operational losses, in general business terms, refer to the situation where a business's expenses exceed its revenues, leading to financial loss.

Based on the provisions of the CGST Act, 2017, and the rules made thereunder, a refund of ITC accumulated due to operational losses is not directly provided for. The refund mechanisms under GST are designed around specific scenarios.

Regards, CA. Praveen Sharma

www.linkedin.com/in/capraveensh