No refund of Input Services under Inverted Duty Structure?

Yet another blow to already ailing Textile Industry.

Madras HC recently on 21.09.2020 in a batch of writ petitions ruled in favor of the revenue.

The petitioners prayed for reading down the provisions of Rule 89(5) along with Clasue (ii) of proviso to sec 54(3).

However, the court ruled that from the time immemorial the Goods and services are being treated distinctively in the laws.

While there has been a legislative trend towards a more uniform treatment as between goods and services, the distinction has certainly not been obliterated

Thus this provision is not violative of article 14.

Also, they discussed the concept of reading down and stated that this concept cannot be followed in this section as it would enlarge the scope rather than curtailment.

It is worthwhile to note that Gujarat HC in a recent judgment read down this provision providing a relief to the taxpayers.

Read More JUDGEMENT- Rule 89(5)- MADRAS HC