Government Notification: No Refund for Certain Input Tax Credits under GST Act

The Central Government, under the Central Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, prohibits the refund of unutilized input tax credit of compensation cess.

The restriction applies when the accumulated credit results from a higher rate of compensation cess on inputs compared to the rate on output supplies, excluding nil rated or fully exempt supplies.

Specifically, the notification targets goods falling under the tariff item 24, encompassing Tobacco and manufactured tobacco substitutes. Ruchi Bisht, Under Secretary to the Government of India, issues the notification, emphasizing adherence to Customs Tariff Act interpretations for clarity.