Will the taxpayer be entitled to refund under Inverted Duty Structure when tax on input erroneously charged by the Supplier at a higher rate and the buyer charged it at actual lower rate?
Can seller charge GST at a lower rate on his outward supply in case his Supplier has erroneously charged GST at a rate higher than actually applicable? Will the taxpayer be entitled to refund under Inverted Duty Structure when tax on input erroneously charged by the Supplier at a higher rate?
The Hon’ble Madras High Court in The Commercial Tax Officer vs. Suzlon Energy Limited and Others, [W.P. No. 10852 & 10855 of 2021 dated 16/11/2023] dismissed the Writ Petition filed by the Department and reaffirmed the order of refund passed by the Assistant Commissioner (Appeals), thereby holding that, the Taxpayer is entitled to refund under Inverted Duty Structure when Input tax is erroneously charged by Supplier at higher rate.
Further, the hon’ble Court held that as far as the contention of the petitioner, that since the supplier of the first respondent had wrongly paid 18% IGST on the input, the first respondent should have paid 18% duty on output, is concerned, this Court is not inclined to accept the same since this Court does not find any substance in the said submission made by the learned counsel for the petitioner for the reason that at any cost, the petitioner cannot insist or advise the Assessee (first respondent) to pay excess rate of duty than the duty prescribed in the law.
The copy of the order is as under: