Petition filed before Rajasthan HC challenging Rule relating to Refund on Account of Inverted Duty Structure

Refund Claims - Taxscan

A writ petition has been challenged before the Rajasthan High Court wherein the petitioner has challenged the provision of Rule 89(5) of the CGST Rules, 2017 as amended vide Notification No. 21/2018-Central Tax and Notification No. 26/2018-Central Tax by way of which the computation mechanism of the Input Tax Credit to be refunded in case of inverted duty structure has been modified to exclude Input Services from the definition of Net ITC with retrospective effect thereby denying refund of Input Services.

The Petition was argued by Mr Pankaj Ghiya with Ms Priyamvada Joshi on the grounds of it being ultra vires the provisions of the new taxing Statute as it is discriminatory, capricious and promotes inequitable treatment. The Hon’ble Division Bench of Justice Mohammad Rafiq and Justice Goverdhan Bardhar on 31.10.2018 admitted the same and Notices were issued to the respondents to be returnable within 6 weeks.

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