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Several GST Rate changes under pipeline to correct Inverted Duty Structure

GST Council may go in for another round of rate changes to correct the remaining instances of inverted duty, apart from withdrawing some exemptions. A group of ministers (GoM) headed by Karnataka chief minister Basavaraj Bommai is working on the second round.

"The inverted duty correction exercise has not concluded yet and there is more work left," said a senior official, adding that the GoM is working on the next list and a proposal may be floated before the next council meeting, which is likely in September. "The last two-three meetings were productive, with many important decisions being taken. But some items are still pending, including textiles," the person said.

What is Inverted Duty Structure?

Inverted duty refers to structures where the rate of tax on inputs is more than the rate of tax on outward supplies, which discourages value addition. If required, tax authorities will engage with industry for feedback, the official said.

Inverted duty structures also prevail in automobiles, including electric vehicles, some electronic items, urea and other fertiliser inputs, according to experts.

The correction in inverted duty structure in sectors such as textiles, electric vehicles, etc, would help the industry in liquidating their accumulated credits, smoothen working capital issues and reduce compliances.

How to calculate refund under inverted duty structure?

GST Inverted Duty Refund Calculator
(New formula w.e.f. 5th July 2022)

The resolution of inverted duty structures in sectors where production-linked incentive (PLI) schemes have been introduced will help improve the internal rate of return. Currently, companies in .......

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Inverted Duty Structure

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GST Rate

I have paid tmone year amount even not able to read full article coming on whatups from your side

Pls look

Dear Sir,
What is the treatment of difference amount of refund under inverted duty structure which earlier we have taken the refund under the inverted duty structure. in other word what impact for change of formula which refund amount has already claimed with old formula.

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