Refund of Accumulated Credit in respect of Input Services or Capital Goods
Section 54(3) states that a registered person may claim refund of any unutilised input tax credit at the end of any tax period where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council.
Section 2(63) defines “input tax credit” means the credit of input tax.
Section 2(62) defines “input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes the integrated goods and services tax charged on import of goods and Taxes paid under Reverse Charge but does not include the tax paid under the composition levy.
Section 2(59) defines “input” means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business.
Accordingly if the rate of tax on inputs are higher than the rate of tax on outward supplies, whether a taxpayer is eligible to claim the credit accumulated, irrespective whether it belongs to inputs or input services or capital goods, as refund of accumulated input tax credit ?
Rule 89(5) Explanation (a) defines Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both.
Whether the Net ITC mentioned under Rule 89(5) which covers only input tax credit availed on inputs is inconsistant with the main empowering provision of Section 54(3) ?