No refund of accumulated unutilised ITC on supply of edible oils and coal to remove IDS

By:

Background:

Earlier, the CBIC vide Notification No. 5/2017- Central Tax (Rate) dated June 28, 2017 (“NN.5/2017-CT(R)”) w.e.f. July 01, 2017 notified that no refund of unutilised input tax credit (“ITC”) shall be allowed under Section 54(3) of the Central Goods and Service Tax Act, 2017(“the CGST Act”) on supply of certain goods specified therein.

Further, the GST Council’s 47th meeting held on June 28-29, 2022 has recommended to add edible oils and coal as goods against which no refund of accumulated unutilised ITC shall be allowed under Section 54(3) of the CGST Act in order to remove inverted duty structure (“IDS”) w.e.f. July 18, 2022.

Accordingly, following notification has issued:

Notification:

The CBIC vide Notification No. 09/2022-Central Tax (Rate) dated July 13, 2022 has issued amendments in NN.5/2017-CT(R) so as to insert the following goods on which no refund of accumulated unutilised ITC shall be allowed under Section 54(3) of the CGST Act in following manner: –

“(i) nothing contained in this notification shall apply to the input tax credit accumulated on supplies received on or after the 1st day of August, 2018, in respect of goods mentioned at serial numbers 1AA, 2, 3, 4, 5, 6, 6A, 6B, 6C and 7 of the Table below; and

(ii) in respect of said goods, the accumulated input tax credit lying unutilised in balance, after payment of tax for and upto the month of July, 2018, on the inward supplies received up to the 31st day of July 2018, shall lapse.

S. No.

Heading Description of Goods

(1)

(2)

(3)

1A.

1507

Soya-bean oil and its fractions, whether or not refined, but not chemically modified

1B.

1508 Ground-nut oil and its fractions, whether or not refined, but not chemically modified.
1C. 1509

Olive oil and its fractions, whether or not refined, but not chemically modified.

1D.

1510 Other oils and their fractions, obtained solely from olives, whether or not refined, but not chemically modified, including blends of these oils or fractions with oils or fractions of heading 1509
1E. 1511

Palm oil and its fractions, whether or not refined, but not chemically modified.

1F.

1512 Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not chemically modified.
1G. 1513

Coconut (copra), palm kernel or babassu oil and fractions thereof, whether or not refined, but not chemically modified.

1H.

1514 Rape, colza or mustard oil and fractions thereof, whether or not refined, but not chemically modified.
1I. 1515

Other fixed vegetable or microbial fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified.

1J.

1516 Vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter- esterified, re-esterified or elaidinised, whether or not refined, but not further prepared.
1K. 1517

Edible mixtures or preparations of vegetable fats or vegetable oils or of fractions of different vegetable fats or vegetable oils of this Chapter, other than edible fats or oils or their fractions of heading 1516

1L.

1518 Vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or in inert gas or otherwise chemically modified, excluding those of heading 1516
1M. 2701

Coal; briquettes, ovoids and similar solid fuels manufactured from coal

1N.

2702 Lignite, whether or not agglomerated, excluding jet
1O. 2703

Peat (including peat litter), whether or not agglomerated”

Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).

CGST (Rate) Notification: https://taxinformation.cbic.gov.in/view-pdf/1009439/ENG/Notifications

IGST (Rate) Notification: https://taxinformation.cbic.gov.in/view-pdf/1009459/ENG/Notifications

UTGST (Rate) Notification: https://taxinformation.cbic.gov.in/view-pdf/1009447/ENG/Notifications

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