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CBIC notifications related to refund of Input Tax Credit (ITC) on fabrics

Circular No.ES/137/2017-18                                                                                      July 27, 2018

To: Members of the Council

SubCBIC notifications related to refund of Input Tax Credit (ITC) on fabrics

Dear Member,

Kindly refer to Council’s earlier Circular No.ES/132/2018-19  dated 23rd July, 2018 informing about the Press Release issued by the Ministry of Finance on 21st July, 2018  wherein the GST Council had recommended allowing of refund to fabrics on account of inverted duty structure.

With regards to the above, the Central Board of Indirect Taxes and Customs (CBIC) has issued following notifications notifying that the refund of Input Tax Credit (ITC) accumulated on supplies received of fabrics shall be applied on or after the 1st day of August, 2018.

In the said notifications, in the opening paragraph the following proviso shall be inserted, namely:-

Provided that,-

  1. 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 5, 6, 6A, 6B, 6C and 7  of the Table below; and  
  1. 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.”.

The relevant extract of the earlier Notifications notifying the Tariff items for fabrics under the jurisdiction of the Council is given here-below:-

Sr. No.

Tariff item, heading, sub- heading or Chapter

Description of goods


5407, 5408

Woven fabrics of manmade textile materials


5512 to 5516

Woven fabrics of manmade staple fibres



Knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials




Corduroy fabrics



Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)”.



Knitted or crocheted fabrics (All goods)

Members may kindly make a note of the above amendments.

Thanking you,

Yours faithfully,



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