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GST - Section 54(3)(ii) of CGST Act, 2017- Refund of accumulated input tax credit on account of Inverted Duty structure, Scope of Circular No. 135/05/2020-GST dated 31.03.2022 - Petitioner supplies LPG-Domestic, Bunker Fuel (Furnace Oil), Superior Kerosene Oil (SKO)-PDS which attract 5% GST and LPG Non-Domestic, Auto LPG, Lubricants, Petrochemicals etc. which are chargeable to 18% GST - The petitioner uses various inputs attracting GST rate of 5%, 18% and 28% - Refund of accumulated ITC on account of inverted duty structure on supply of LPG-Domestic, Bunker Fuel, Superior Kerosene Oil (SKO)-PDS – Rejection of refund applications on the ground that in respect of PDS kerosene and LPG domestic, refunds could not be granted as GST rates on at least one item on the inputs and output/outward supplies was the same - Whether the petitioner is entitled to refund of accumulated ITC under Section 54(3)(ii) of the CGST Act in cases where the input and the output supplies are the same, though attracting different tax rates - HELD – The Section 54(3)(ii) of the CGST Act does not proscribe/forbid the grant of refund where the input and the output are the same. The Clause (ii) of the proviso to sub-section (3) of Section 54 does not contemplate comparing the rate of tax on the principal input with the rate of tax chargeable on the principal output supply. There is neither any reason nor any scope to further confine the refund of unutilised ITC only to the cases where the rate on main input is higher than the rate of tax on the principal output – Where there are multiple inputs attracting different rates of tax, as per the formula provided in Rule 89(5) of the CGST Rules, the expression “Net ITC” covers the ITC availed on all inputs in the relevant period, irrespective of their rate of tax - The Revenue's contention that the petitioner is not entitled to refund of unutilized ITC as the rate of bulk LPG and bottled LPG is the same, is unsustainable as it impermissibly disregards the rate of tax on other inputs - Respondent has erroneously placed reliance upon Para 3.2 of Circular No. 135/05/2020-GST dated 31.03.2020 though the same has no application in the present case - the Circular No. 135/05/2020-GST dated 31.03.2020 merely sought to clarify the refund provisions in cases where the ITC is accumulated on account of different rates being applicable at different points of time and it has no application where the ITC has accumulated on account of rate of taxes on certain inputs being higher than the tax chargeable on the output supply - the petitioner is eligible to claim refund of inverted duty structure, even when input and output are same - the impugned order is set aside and the respondents are directed to grant refund to the petitioner along with applicable interest – The writ petition is allowed
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