Summary:
If the textile processors are getting the ITC credit, the powerloom weavers are also eligible for the same.” The central government and the GST Council have blocked Rs 400 crore worth of accumulated ITC credit of the powerloom sector from July 31, 2017 to July 31, 2018. Assuming that the net input tax credit (ITC) availed on inputs i.e yarn during this period was Rs 30 lakh, the inverted duty structure comes to Rs 5 lakh. The GST payable thereon is Rs 25 lakh (5%). In other words, the manufacturer has accumulated Rs 5 lakh on inputs because of inverted duty structure during the same period.If the ITC balance lying untilised with the manufacturer is more than this amount, say Rs 10 lakh, the ITC equal to Rs 5 lakh will lapse.President of FOGWA, Ashok Jirawala told TOI, “There is no section under the GST law to block the ITC credit..