Is it possible to claim refund of unutilised input tax credit under GST?

The author explains queries on GST law

Is it possible to claim refund of unutilised input tax credit under the GST? 

Under the goods and services tax (GST) regime, refund of unutilised input tax credit can be claimed only in respect of unutilised input tax credit relating to zero-rated supplies made without payment of tax or where input tax credit has been accumulated on account of inverted duty structure. GST law does not provide for a refund in any other scenario. 

Is input tax credit available on employee welfare expenses like uniforms, shoes, medical facility, etc?

Under the GST law, a registered person should be allowed to avail of input tax credit in respect of all expenses, as long as these have been incurred in the course or furtherance of business, unless specifically restricted under the law. Expenses incurred for personal use is not available. 

If the aforesaid expenses are incurred in the course or furtherance of business and not for personal use, the input tax credit should be available. Also, input tax credit in respect of health services has been specifically restricted under GST law. 

I am a businessman engaged in the selling electronic products. To increase sales during the festival season, I plan to announce an offer of buy one and get one free, free gifts, etc. How will the free supplies be treated under the GST? 

Only supplies made for a consideration to unrelated parties attract GST. Since you would be supplying free goods without any consideration, these should not attract GST as long as these are being supplied to unrelated parties.

Would a trader engaged in supplying of exempted goods like grains and pulses need to be registered under the GST if turnover from such supplies exceeds Rs 20 lakh? 

GST law prescribes that a supplier of goods/services having an annual aggregate turnover of Rs 20 lakh (on a pan-India basis) during a financial year should be required to obtain GST registration. For specified north-eastern states, this threshold limit is Rs 10 lakh. 

GST law also provides that a person engaged exclusively in the supply of goods not liable to tax or wholly exempt from tax should not be required to obtain registration.

My company has opted for the composition scheme by mistake but we are charging GST from our clients and taking input tax credit from July. What is the solution? 

GST law provides an option to a supplier of goods having annual aggregate turnover not exceeding Rs 75 lakh to opt for payment of GST under the composition scheme. Further, such composition supplier is not allowed to avail input tax credit of GST paid on procurement of goods or services. 

In the present case, despite opting for the composition scheme, your company is charging GST on the invoice and simultaneously availing of the input tax credit. In such a scenario, your company is required to file an intimation for withdrawal from the composition scheme in Form GST CMP-04, as you do not fulfil the prescribed conditions. 

We store our finished goods in a rented warehouse. We pay GST on the rent. Can we avail input tax credit? 

Under the GST law, input tax credit is available for all input services used in the course or furtherance of business, unless specifically restricted. 

The input tax credit in respect of renting of immovable property has not been specifically restricted under the GST law. Therefore, you should be eligible to avail of input tax credit paid to a supplier of input service as long as this was used in course or furtherance of business and you are registered in the state where the warehouse is located. 

The writer is tax partner, PwC India. Aditya Khanna, associate director, PwC contributed to this column. The views expressed are experts’ own. Send your queries to yourmoney@bsmail.in