Page 32 - GSTL_ 28th May 2020_Vol 36_Part 4

J92 GST LAW TIMES [ Vol. 36
Refund Amount = Turnover of zero-rated supply of goods + Turnover
of zero-rated supply of services) x Net ITC ÷ Adjust-
ed Total Turnover
Where, -
A. “Refund amount” means the maximum refund that is admis-
sible
B. “Net ITC” means input tax credit availed on inputs and input ser-
vices during the relevant period other than the input tax credit
availed for which refund is claimed under sub-rules (4A) or
(4B) or both.
C. “Turnover of zero-rated supply of goods” means the value of
zero-rated supply of goods made during the relevant period
without payment of tax under bond or letter of undertaking,
other than the turnover of supplies in respect of which refund
is claimed under sub-rules (4A) or (4B) or both;
D. “Turnover of zero-rated supply of services” means the value
of zero-rated supply of services made without payment of tax
under bond or letter of undertaking, calculated in the follow-
ing manner, namely :-
Zero-rated supply of services is the aggregate of the payments
received during the relevant period for zero-rated supply of
services and zero-rated supply of services where supply has
been completed for which payment had been received in ad-
vance in any period prior to the relevant period reduced by
advances received for zero-rated supply of services for which
the supply of services has not been completed during the rel-
evant period;
E. “Adjusted Total Turnover” means the sum total of the value
of -
(a) the turnover in a State or a Union territory, as defined
under clause (112) of section 2, excluding the turnover
of services; and
(b) the turnover of zero-rated supply of services deter-
mined in terms of clause (D) above and non-zero-rated
supply of services,
excluding -
(i) the value of exempt supplies other than zero-
rated supplies; and
(ii) the turnover of supplies in respect of which re-
fund is claimed under sub-rule (4A) or sub-rule
(4B) or both, if any, during the relevant period.
The above referred formula defines net inputs tax credit means input tax credit
availed on inputs and input services thereby excluded the input tax credit availed
on capital goods. Consequently, the persons engaged in zero-rated supplies are not
getting the refund of input tax credit on capital goods. Now, the question that aris-
es is whether the Rule which prescribes the procedure for claiming the refund can
restrict the refund by overriding the entitlement given to person making zero-rated
supplies under Section 16 of IGST Act, 2017 and Section 54 of CGST Act, 2017.
In this regard, author is of the view that Section 16 of IGST Act, 2017 is
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