Facts of the Case

M/S Ramcharan Food Industries Pvt. Limited, Kakinada, dealing in edible oils, applied on 17.07.2022 for refund of unutilised input tax credit on account of an inverted duty structure for the period October 2021 to March 2022. The first respondent rejected the claim by order dated 16.04.2024 in Form RFD-06, relying on Notification No. 9 of 2022 dated 13.07.2022 (effective 18.07.2022) and CBIC Circular No. 181/13/2022-GST dated 10.11.2022, which the department read as barring any such refund after 18.07.2022 irrespective of when the application was filed. The petitioner sought quashing of the rejection, also citing lack of a DIN reference as covered by an earlier ruling of the same Court.

Issues Involved

  1. Whether Notification No. 9 of 2022, restricting refund of unutilised ITC on account of inverted duty structure, bars refund applications filed before the notification's effective date of 18.07.2022, or only restricts refunds accruing for periods after that date.

Petitioner's Arguments

  • The refund application itself was filed on 17.07.2022 — a day before the notification took effect — and pertained to accumulated ITC for the period October 2021 to March 2022.
  • The rejection order also lacked a DIN reference, rendering it void as per the Court's earlier ruling in W.P. No. 5253/2023, which struck down the relevant portion of the CBIC circular.

Respondent's Arguments

  • The department maintained that Notification No. 9 of 2022 and the CBIC circular dated 10.11.2022 clarified that no refund of ITC on account of inverted duty structure could be granted for any period after 18.07.2022, and applied this bar to reject the petitioner's claim.

Court Order / Findings

  • The Court referred to its own earlier decision dated 29.01.2025 in W.P.No. 5253 of 2023 and batch, which held that Notification No. 9 of 2022 restricts refunds accruing in relation to periods after 18.07.2022, and that an application for refund could validly be made either before or after that date.
  • Following that ruling, the Court set aside the rejection order dated 16.04.2024 and directed the first respondent to consider the petitioner's refund claim irrespective of the date of application, restricting the refund only to input tax credit accruing before 18.07.2022, subject to verification.
  • The writ petition was disposed of with no order as to costs.

Important Clarification

  • Notification No. 9 of 2022 restricts inverted-duty-structure refunds only in respect of the period of accrual (post-18.07.2022), and does not disqualify a refund application merely because it is being processed or decided after that date.
  • Refund claims filed before the cut-off, for ITC accrued before the cut-off, remain payable even if adjudicated later, subject to departmental verification.

Sections Involved

  • Section 54(3), CGST Act, 2017 – refund of unutilised input tax credit, including on account of inverted duty structure.
  • Notification No. 9/2022-Central Tax – restriction on inverted duty structure refunds effective 18.07.2022.
  • Circular No. 181/13/2022-GST – CBIC clarification on the scope of Notification No. 9 of 2022.

Decision – In Favour of

The decision is in favour of the assessee, M/S Ramcharan Food Industries Pvt. Limited — the rejection order was set aside and the refund claim directed to be reconsidered on merits.

Case Details

High Court of Andhra Pradesh at Amaravati – Writ Petition No. 6798 of 2025 – Coram: Hon'ble Justice R. Raghunandan Rao and Hon'ble Justice Sumathi Jagadam – Order dated 09.07.2025.

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