Refund of Unutilised ITC under Rule 89(5): Supreme Court Affirms Retrospective Benefit, Dismisses Re

The treatment of refunds of unutilised Input Tax Credit (ITC) under an inverted duty structure has been a contentious issue within the realm of GST. Initially, Rule 89(5) of the CGST Rules caused disputes and refund denials by excluding input services from refund eligibility, impacting various sectors. However, with the issuance of Notification No. 14/2022-CT on 5 July 2022, amendments were made to the formula, now encompassing input services. Subsequently, the CBIC's circular on 10 November 2022 limited this benefit to prospective application, sparking further legal challenges. J the App by JustIDT is delighted to share the snapshot on the recent dismissal of the Revenue's Special Leave Petition (SLP) against Tirth Agro Technology Pvt. Ltd. that solidifies the retrospective application of the refund formula.