Refund of transitional credit under gst Circular

Refund of transitional credit under gst Circular issued vide no. Circular No. 37/11/2018-GST dt.15.03.2018.

It Reads as:

8. Refund of transitional credit: Refund of unutilized input tax credit is allowed in two scenarios mentioned
in sub-section (3) of section 54 of the CGST Act. These two scenarios are zero rated supplies made without payment of tax and inverted tax structure. In sub-rule (4) and (5) of rule 89 of the CGST Rules, the amount
of refund under these scenarios is to be calculated using the formulae given in the said sub-rules.

The formulae use the phrase ‘Net ITC’ and defines the same as “input tax credit availed on inputs and
input services during the relevant period other than the input tax credit availed for which refund is
claimed under sub-rules (4A) or (4B) or both”. It is clarified that as the transitional credit pertains to
duties and taxes paid under the existing laws viz., under Central Excise Act, 1944 and Chapter V of
the Finance Act, 1994, the same cannot be said to have been availed during the relevant period and thus,
cannot be treated as part of ‘Net ITC’.