Notification No. 29/2017 - Central Tax (Rate) Explained

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Notification No. 29/2017 - Central Tax (Rate): Seeks to amend notification no. 5/2017- central tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding restriction of refund on corduroy fabrics.

GST: [TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

G.S.R. (E).- In exercise of the powers conferred by clause (ii) of the proviso to sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council,

hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 5/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 677(E), dated the 28th June, 2017, namely:-

In the said notification, in the Table, after S. No. 6 and the entries relating thereto, the following serial numbers and the entries shall be inserted, namely:-

“6A

5801

Corduroy fabrics.”.

(Mohit Tewari)
Under Secretary to the
Government of India

Note: - The principal notification No. 5/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 677(E), dated the 28th June, 2017.

📚 Frequently Asked Questions (FAQs): Notification No. 29/2017 – Central Tax (Rate)

Q1: Is refund allowed on corduroy fabrics under GST?

Answer: No, refund is restricted.
As per Notification 29/2017, refund of accumulated ITC due to inverted duty structure is not allowed for corduroy fabrics. However, ITC can still be used for adjusting output tax liability.

Q2: What is corduroy fabric in GST terms?

Answer: It is classified under HSN 5801.
Corduroy is a textile fabric with a distinct ribbed texture. For GST purposes, classification under this HSN determines refund eligibility.

Q3: Can exporters claim refund for corduroy fabrics?

Answer: Refund is restricted under inverted duty structure.
However, exporters may still claim refund under other provisions like zero-rated supply, depending on structure of transaction.

Q4: Does this mean ITC is blocked?

Answer: No, ITC is not blocked.
You can still use ITC to offset output GST liability. Only refund in cash is restricted.

Q5: Why did government restrict refund?

Answer: To control misuse and revenue loss.
High refund claims due to inverted duty structure led to this restriction for specific goods.

Q6: What is inverted duty structure?

Answer: Input tax is higher than output tax.
This leads to accumulation of ITC, which businesses usually claim as refund.

Q7: Is this restriction still applicable?

Answer: Yes, unless amended later.
Businesses should always check latest notifications before filing refunds.

Q8: Can wrong classification affect refund?

Answer: Yes, significantly.
If your product is wrongly classified as corduroy, refund may be denied.

Q9: Which notification contains refund restriction list?

Answer: Notification 5/2017.
Notification 29/2017 only adds corduroy fabrics to that list.

Q10: Does this affect small businesses?

Answer: Yes, if dealing in such fabrics.
Even small traders can face working capital issues due to blocked refunds.

Q11: Can refund be claimed later?

Answer: No, restriction applies permanently.
Unless law changes, refund remains restricted.

Q12: Who should be careful about this?

Answer: Textile sector businesses.
Especially manufacturers and exporters dealing in specific fabrics.

Q13: Is GST rate changed in this notification?

Answer: No, only refund rules changed.
Tax rates remain unaffected.

Q14: Can professionals help in such cases?

Answer: Yes, and often required.
GST classification and refund rules can be complex, and mistakes are common.

Q15: Where can I get help for GST compliance?

Answer: Professional support can help avoid errors.
Many businesses prefer expert assistance for compliance and refund planning.

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