Inverted-duty refunds may include higher-tax packing-material credit where qualifying inputs cause accumulation despite principal-input rate parity.
Notes
GST
Packing materials used or intended to be used in business may qualify as inputs, allowing their input tax credit to support an inverted-duty refund where their higher tax rate causes accumulated credit. Section 54(3)(ii) requires examination of all qualifying inputs rather than only the principal raw material. Composite-supply treatment determines the rate on the outward supply but does not remove the character of packing materials as inputs. The clarification concerning rate reductions on the same goods does not govern separately procured higher-rated packing materials. Eligibility remains subject to input tax credit conditions, blocked-credit restrictions, statutory refund exclusions, proof of causation, formula-based computation, and prescribed refund documentation.
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