Refund of unutilised Input Tax Credit on input services: Rule 89(5) of CGST Rules upheld by Supreme Court

The Court agreed that the formula prescribed by Rule 89(5) suffers from anomalies but it cannot be a ground for the Court to strike down the Rule. Instead it has to be examined by the government.
GST, Supreme Court
GST, Supreme Court

The Supreme Court on Monday upheld the validity of Rule 89(5) of the Central Goods and Service Tax Rules, 2017 (CGST Rules) which prescribes a formula excluding the refund of ‘unutilised input tax’ paid on ‘input services’ as part of ‘input tax credit' (ITC) [Union of India v. VKC Footsteps India Private Ltd].

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