Hon’ble Gujarat HC has held that Rule 89(5) of the CGST Rules, in as much as it restricts the refund to only inputs in case of inverted duty structure refund, is ultra-virus Section 54 of the CGST Act.
When Section 54 of the CGST Act allows refund of ‘any unutilized input tax credit’, which term includes both ‘inputs’ and ‘input services’, the same cannot be restricted by Rules framed under the said Section.
Hence, refund of both ‘inputs’ and ‘input services’, would be available in case of inverted duty structure.
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