GST Input Tax Credit Refund Restrictions on Specific Goods

Central Government restricts refund of unutilized input tax credit on certain goods under the Central Goods and Services Tax Act, 2017.

Recommendations from the Council drive this notification, preventing refunds where input tax credit exceeds output tax on specified goods. Goods listed in the table, including woven fabrics, railway locomotives, coaches, and parts thereof, are subject to this restriction.

The restriction applies to goods with higher input tax rates than their output supplies, except for nil rated or fully exempt items. Effective from July 1, 2017, this measure aims to maintain tax balance and prevent undue refunds.

The Customs Tariff Act, 1975, provides definitions for tariff items, headings, sub-headings, and chapters. This move ensures prudent tax management while facilitating trade and commerce across specified sectors.