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GST: Gujarat High Court Allows Refund Of Tax On Input Services Under Inverted Duty Structure

GST: Gujarat High Court Allows Refund Of Tax On Input Services Under Inverted Duty Structure

In a relief to businesses, the Gujarat High Court ruled that companies can claim refund using unutilised tax credit arising from input services under the inverted duty structure. A bench comprising Justice JB Pardiwala and Bhargav Karia observed that disallowing refund of the tax paid on input services is contrary to the Central Goods and Services Tax Act. As such, the court ruled that businesses must be allowed to factor in the tax paid on input services for calculating the claim of refund under the inverted duty structure.

In doing so, the court read down of a part of the CGST rules that excluded input services from the purview of a refund.

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