Industry Hails Centre’s Decision on Input Tax Credit Refund

Trade & Policy

Industry Hails Centre’s Decision on Input Tax Credit Refund

The Union Government’s decision to accept the textile industry’s pressing demand for refund of input tax credit (ITC) on fabric has been unanimously hailed by people across the sector. The government’s move to accept the industry’s demand was described as a welcome step by Kamal Dalmia, chairman, Focal Point Industries Association.

The refund clause that was restored by the government was covered under the notification number 5/2017 Central Tax Rate, dated June 28, 2017. It was amended by notification number 20/21018 dated July 26, 2018.

The provision stated that the input tax credit that was accumulated to the extent of inward supplies received up to July 2018 and after making payment up to July 2018 will lapse. Textile industrialists pointed out that the clause implied that no credit of tax will be given on the fabric stock lying as on July 31. Terming it a draconian order, he said it would have been a big blow on the fabric traders.