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

Sub: CBIC 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 23^rd July, 2018 informing about the Press Release issued by the Ministry of Finance on 21^st 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.

• Notification No. 20/2018-Central Tax (Rate) dated 26^th July, 2018 seeking to  amend Notification No 05/2017-Central Tax (Rate), dated  28^th June, 2017

• Notification No. 21/2018-Integrated Tax (Rate) dated 26^th July, 2018 seeking to amend Notification 05/2017-Integrated Tax (Rate),dt. 28-06-2017

• Notification No. 20/2018-Union Territory Tax (Rate) dated 26^th July, 2018-  seeking to amend Notification 05/2017-Union Territory Tax (Rate),dt. 28-06-2017

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  

2. 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:-

Members may kindly make a note of the above amendments.

Thanking you,

Yours faithfully,

S. BALARAJU
EXECUTIVE DIRECTOR