Section 54(3) • Rule 89(5)

Inverted Duty Refund Calculator

Estimate your eligible GST refund when your Input Tax Rate (Purchases) is higher than your Output Tax Rate (Sales).(Strictly for Inputs. Services & Capital Goods Excluded)

Enter Details (Monthly/Quarterly)

Enter values as per your GSTR-1 and GSTR-3B.

Net ITC (Rule 89(5))

₹

Exclude: Input Services (Rent/Fees) & Capital Goods

Inverted Rated Turnover

₹

Sales where Tax Rate < Purchase Rate

Adjusted Total Turnover

₹

Sum of All Taxable + Exempt Sales

Tax Payable on Inverted Turnover

₹

The actual output tax (e.g. 5%) liability on the inverted sales.

Eligible Refund Amount

₹0

Based on Section 54(3)

Calculation Breakdown

Pro-rata Ratio0.00%

Pro-rata Net ITC₹0

Less: Tax Payable- ₹25,000

Final Refund₹0

This calculator provides an estimate. The actual refund application (RFD-01) on the GST Portal may require validating distinct invoices.

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Can you claim this refund?

Eligible Scenarios

Textile Sector: Buying Yarn @ 12%, Selling Fabric @ 5%.
Footwear: Inputs @ 18%, Footwear @ 5% or 12%.
Traders: Trading in goods where tax rate was reduced by Govt.
Rate Change: Accumulation due to rate reduction notification.

Refund Blocked If

Nil Rated/Exempt: Output supply is fully exempt or nil rated.
Input Services: Accumulation is due to high tax on Services (Rent/Legal).
Export Duty: Goods exported are subject to export duty.
Specific Notification: Goods notified by Council (e.g. Rail Locomotives).

Understanding the Logic

What is Inverted Duty?

It happens when you pay more tax on purchases than you collect on sales. Instead of letting this credit sit in your ledger forever, Section 54(3) allows you to claim it back as cash.

Critical Exclusion

The refund is strictly for Inputs (Goods). You cannot claim a refund for tax paid on Services (Rent, Transport) or Capital Goods (Machinery), even if they are part of your business.

Refund Workflow (Step-by-Step)

Calculate

Apply Rule 89(5) formula to find eligible amount.

File RFD-01

Submit application on GST Portal with Annexures.

Verification

Officer checks GSTR-2B & Invoice details.

Bank Credit

Refund sanctioned & credited to bank account.

Officer's Pre-Audit Checklist

Before You File

Before approving your RFD-01, the tax officer will verify these 4 points. Ensure you pass them.

GSTR-2B Matching

Does your claimed Net ITC match with invoices appearing in GSTR-2B?

Turnover Recon

Does the Inverted Turnover match the figures reported in GSTR-1 and 3B?

Input vs Service

Have you accidentally included ITC on Services (e.g. Audit Fees) in Net ITC?

Unjust Enrichment

Have you passed on the benefit of unutilized ITC to customers? (Self-declaration)

Time Barring Limitation

You must file the refund application (RFD-01) within 2 years from the end of the financial year in which such claim for refund arises. Don't wait for the last day.

Documents Required

Checklist

Statement 1A (Invoice Details)

GSTR-2A / 2B Matching Report

Declarations under Rule 89(2)

Copy of GSTR-3B Returns

Copy of GSTR-1 Returns

CA Certificate (if claim > 2 Lakh)