Inputs you’ll need before using the calculator
Prepare these numbers
- Turnover of inverted rated supplies for the period
- Adjusted total turnover (as applicable)
- Net ITC (as applicable per rule scope)
- Tax payable on inverted rated supplies
Tip: reconcile turnover/tax with returns and keep a working sheet for how you derived each input.
Common mistakes to avoid
- Using total turnover instead of inverted turnover (or vice versa)
- Including ineligible ITC in Net ITC by mistake
- Mismatch between purchase records and 2B for key invoices
- Claiming refund when outward supplies are nil-rated/exempt
Not legal advice • Verify before filing. For high-value claims, confirm current rule text and portal validations with your CA.
Inverted duty refund calculator tool
Not legal advice • Verify before filing
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If you’re validating ITC inputs invoice-wise, reconcile purchase records with portal statements before filing.
Next step after estimating
Reconcile ITC and keep your filing timeline ready
Clean invoice matching and consistent period-wise numbers reduce refund objections and delays.
Not legal advice • Verify before filing
Can you claim this refund?
Eligible scenarios
- Textile: Buying yarn @ 12%, selling fabric @ 5%
- Footwear: Inputs @ 18%, outward @ 5%/12%
- Traders: Accumulation due to notified rate reduction
- Rate change: Accumulation due to notification changes
Refund blocked if
- Nil-rated/exempt: outward is fully exempt/nil-rated
- Services-led accumulation: mainly due to input services
- Export duty: exported goods subject to export duty
- Notified exclusions: specific goods notified by Council
Understanding the logic
What is inverted duty?
It happens when you pay more tax on purchases than you collect on sales. Section 54(3) may allow a refund of accumulated ITC in eligible cases (subject to conditions and exclusions).
Critical exclusion
Eligibility and scope are rule-driven. Many cases treat Net ITC for inverted duty refunds as linked to inputs (goods), and often exclude input services and capital goods for this category. Verify your scenario before filing.
Formula note (important)
The exact formula and scope can change through rule amendments and interpretation. This calculator provides a practical estimate aligned with common computation workflows. For high-value claims, confirm the latest position with a professional.
Conceptual formula (overview)
Max Refund ≈ (Net ITC × Inverted Turnover ÷ Adjusted Total Turnover) − Tax Payable (subject to rule terms)
Note: The portal outcome can differ based on notified exclusions, definition of Net ITC for your category, and officer verification.
Refund workflow (step-by-step)
1
Calculate
Estimate eligible amount using turnover + Net ITC.
2
File RFD-01
Submit application on portal with annexures.
3
Verification
Officer checks figures, documents & matching.
4
Bank credit
Refund sanctioned and credited to bank.
Officer’s pre-audit checklist
Before you fileBefore approving your RFD-01, officers commonly verify these points. Ensure your claim can pass basic reconciliation checks.
GSTR-2B matching
Does your claimed Net ITC reconcile with invoices appearing in GSTR-2B where relevant?
Turnover reconciliation
Does inverted turnover reconcile with figures reported in GSTR-1 and 3B?
Scope check
Have you excluded ineligible ITC (services/capital goods) based on your scenario?
Declarations
Have you prepared the necessary declarations/self-certification as applicable?
Time-barring limitation
Refund applications (RFD-01) must generally be filed within 2 years from the end of the financial year in which the claim arises (subject to conditions). Don’t wait for the last day.
Documents required
ChecklistStatement 1A (Invoice Details)
GSTR-2A / 2B Matching Report
Declarations under Rule 89(2) (as applicable)
Copy of GSTR-3B Returns
Copy of GSTR-1 Returns
CA Certificate / Self-certification (if applicable)
Frequently asked questions
What is the Inverted Duty Structure?
Inverted Duty Structure arises when the GST rate on inputs (purchases) is higher than the GST rate on output supplies (sales). Example: buying yarn at 12% and selling fabric at 5%.
Does Net ITC include input services?
Net ITC for inverted duty refund calculation is commonly treated as linked to inputs (goods). Input services and capital goods are often excluded for this category. Verify the latest rule position for your scenario.
Can traders claim this refund?
Traders may claim refund if there is accumulation due to an inverted structure (input rate higher than output rate), subject to conditions and notified exclusions.
Can I claim refund on capital goods?
Refund under inverted duty structure is generally not for capital goods ITC. Capital goods ITC is typically carried forward in the electronic credit ledger.
What is the time limit for filing RFD-01?
Refund application (Form GST RFD-01) must generally be filed within 2 years from the end of the financial year in which the claim arises, subject to conditions.
Is refund allowed if my output is nil-rated or exempt?
If outward supplies are fully nil-rated/exempt, refund under inverted duty structure is generally not available. This category is for taxable outward supplies at a lower rate than inputs.
Which returns/records should match before I file?
Your turnover and tax payable should broadly reconcile with GSTR-1 and GSTR-3B, and ITC should reconcile with your purchase records and GSTR-2B where applicable.
What usually causes refund objections or deficiencies?
Common reasons include mismatch of turnover/ITC with returns, ineligible ITC included in Net ITC, incorrect period selection, missing statements/declarations, or inconsistencies in invoice data.
Do I need a CA certificate?
Depending on claim amount and applicable rules, you may need CA certification or self-certification. Check current portal requirements for your claim type and amount.
Is this calculator a substitute for legal advice?
No. This is a planning/estimation tool. For final filing decisions—especially high-value claims—verify the latest rule text, notifications, and portal validations with a professional.
Sources & verification
Last reviewed
26 Jan 2026•For high-value claims, confirm the latest rule position and portal validations with your CA.
Primary references
- CGST Act: Section 54(3) (refund of unutilized ITC in eligible cases).
- CGST Rules: Rule 89(5) (inverted duty refund computation framework).
- GST Portal: RFD-01 filing workflow & status tracking (Services → Refunds).
- CBIC: notifications/circulars that may change exclusions, scope, and interpretations.
See our Accuracy Policy for how we review and update tools/content.
Not legal advice • Verify before filing • Tool URL: https://thegstcalculator.in/tools/inverted-duty-calculator