Page 30 - GSTL_20th August 2020_Vol 39_Part 3

J62 GST LAW TIMES [ Vol. 39
Section 49(4) of CGST Act, 2017 - The amount available in the electronic credit ledg-
er may be used for making any payment towards output tax under this Act or un-
der the Integrated Goods and Services Tax Act in such manner and subject to such
conditions and within such time as may be prescribed.
The above rule binds the taxable person to bifurcate the unutilized input tax
credit between the input and input services. Further rule also binds the assessee for the
payment of the output tax from the electronic credit ledger with the amount accumulated
from the goods and the balance from the services.
Thus Rules sets the priority for the payment of output tax that is first to be set
off from the inputs and then from the input services however such binding is not created
by statute.
Assessee in our opinion is free to use the credit of the input tax from the brought
forward credit, input tax credit accumulated on account either of input or input services.
Hon’ble High Court of Bombay in case of Raymond UCO Denim Pvt. Ltd. v.
The Union of India and Others [TOG-568-HC-BOM-GST-2019] - Petitioner challenges
the vires of Rule 89(5) of the CGST Rules on the ground that it runs contrary to the pro-
visions of Section 54(3) of the Act, 2017 - Petitioner contends that sub-rule (5) of Rule 89
gives the formula for computation of refund of input tax credit and explanation (a) there-
in excludes input tax service credit from the definition of Net ITC, though it is shown
under the turnover of inverted rated supply of goods and services therein.
Restriction of refund on supply of certain goods and services
(A) Supply of services
Supply of services specified in sub-item (b) of Item 5 of Schedule II
of the Central Goods and Services Tax Act - [Notification No.
15/2017-C.T. (Rate), dated 28-6-2017]
(B) Supply of goods
No refund for following goods - [Notification No. 5/2017-C.T. (Rate),
dated 28-6-2017]
(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 Se-
rial Numbers 1, 2, 3, 4, 5, 6, 6A, 6B, 6C and 7 of the Table be-
low; and [Notification No. 20/2018-C.T. (Rate), dated 26-7-2018]
(ii) in respect of said goods, the accumulated input tax credit ly-
ing 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.”. [Notification No.
20/2018-C.T. (Rate), dated 26-7-2018]

S. Tariff item, Description of Goods
No. heading,
sub-heading
or Chapter
(1) (2) (3)
1. 5007 Woven fabrics of silk or of silk waste -
2. 5111 to 5113 Woven fabrics of wool or of animal hair
3. 5208 to 5212 Woven fabrics of cotton

GST LAW TIMES  20th August 2020  30