Andhra Pradesh High Court Strikes Down Restriction on IDS Refunds for ITC Accumulated Before 18 July 2022

The Andhra Pradesh High Court ruled that the Central Board of Indirect Taxes and Customs circular restricting refunds for Inverted Duty Structure (IDS) was invalid.
The court allowed refunds for ITC accumulated before July 18, 2022, even if the refund application was filed after that date.
The court quashed the refund rejection orders and directed the Revenue to reconsider the refund applications.
The petitioner, an edible oil manufacturer, had accumulated ITC on account of IDS before July 18, 2022.
The petitioner filed a refund application after July 18, 2022, and the refund was rejected based on the circular.
The Revenue argued that the circular clarified that refund applications would not be permissible after July 18, 2022, and that the refund claim could not be made because it was not filed within two years.
The petitioner argued that the notification did not restrict refunds for the period prior to July 18, 2022, even if filed after that date.
The petitioner also argued that the restriction should only apply to ITC arising after July 18, 2022, and not to ITC that had accumulated before this date.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.