As per 54(3)(ii) of CGST Act, 2017 Supplies made to Ministry of Defence/DRDO/Ship Building Centre or any public funded research institution for research purposes are eligible for refund of Excess Input Tax under this category. This is important for traders and businesses to know as supplies made to these organizations attract GST @ 5%.
List of items eligible for Refund
Goods such as Scientific and technical instruments, apparatus, equipment (including computers); accessories, parts, consumables and live animals (experimental purpose); computer software, Compact Disc-Read Only Memory (CD-ROM), recorded magnetic tapes, microfilms, microfiches, electrical items, batteries, regulators, coils Prototypes or any other goods for research purpose supplied to Ship Building Centre are eligible for refund of closing Input Credit.
Other Sectors eligible for Refund
Apart from the suppliers to Ship Building Centre the following persons in general are also eligible for Inverted Duty Refunds :-
- Government Contractors
- Merchant Exporters selling the Goods @0.1% to the exporters
- Engaged in execution of Solar Power Projects
- Sellers of Granite slabs,
- Those who are in Mining,
- Suppliers to Railways
- Boat manufacturers,
Though there are many suppliers/businessmen engaged in the above business somehow due to lack of knowledge, confusion, divergent practices in the GST department companies are not applying for these refunds. Very few people are applying for these refunds. Due to disruption of Covid -19 many businesspeople are suffering from cash crunch & working capital pressure.
It is high time for businesspeople who are in the above businesses to apply for refunds from the GST department so that it will give them some working Capital Cushion. Unutilized balances in Cash ledger, TDS Credits also can be claimed as Refund. GST department is sanctioning these refunds.
(The writer is a Chartered Accountant, partner in Hiregange & Associates. He is also CMA, LL.B specialized and domain expert in Customs, Goods & Service Tax Law, Foreign Trade Policy, EOU’s and SEZ’s.)