Inverted Duty Refunds - Moving Beyond Inputs to the Entire Cost Architecture

The proposed expansion of the inverted-duty refund mechanism seeks to address a longstanding limitation in GST, under which accumulated ITC attributable to input services and capital goods has generally remained outside the refund framework. The Council has proposed extending refunds to eligible input services availed from 1 November 2026 and to capital goods credit in specified zero-rated and inverted-duty cases, with the latter spread over 60 months for credit availed from 1 April 2027.