Statement 1A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
When your inputs carry a higher GST rate than your output, the credit that builds up can be claimed back under section 54(3)(ii). The RFD-01 for that claim asks for two statements, Statement 1 and Statement 1A. Statement 1A is the invoice list, and it is where most inverted duty claims pick up their deficiency memos.
Statement 1A is required by Rule 89(2)(h) for a refund of ITC accumulated because the tax rate on inputs is higher than on output supplies. It contains the number and date of the invoices received and issued during the tax period. Statement 1 carries the Rule 89(5) calculation. Only ITC on inputs (goods) counts as Net ITC. Input services and capital goods are excluded, and no refund is available where the output is nil-rated or fully exempt.
What the inverted duty application must carry
The Refunds Handbook (January 2026) lists these items to be filled online for a refund of ITC accumulated due to inverted tax structure:
| Item | Basis |
|---|---|
| Declaration on drawback / IGST refund | Proviso to s.54(3) |
| Declaration on the inverted duty condition | s.54(3)(ii) |
| Undertaking that suppliers' tax has been paid | s.16(2)(c) |
| Statement 1 (refund calculation) | Rule 89(5) |
| Statement 1A (invoices received and issued) | Rule 89(2)(h) |
| Unjust-enrichment self-declaration up to ₹2 lakh, or CA/CMA certificate above that | Rule 89(2)(l)/(m) |
The supporting uploads are the statement of invoices (Annexure B). For periods from 01.01.2022, ITC is checked against GSTR-2B, so invoices missing from GSTR-2B do not count (Circular 197/09/2023-GST).
If you are filing inverted duty claims for the first time since the GST 2.0 rate changes of 22.09.2025, our inverted duty refund service can build Statement 1, Statement 1A and Annexure B from your books and GSTR-2B together.
What Rule 89(2)(h) actually requires
Rule 89(2)(h) asks for "a statement containing the number and the date of the invoices received and issued during a tax period" where the claim is for ITC accumulated because the rate on inputs is higher than the rate on output supplies, other than nil-rated or fully exempt supplies.
So Statement 1A has two halves:
| Half | What goes in | Why the officer needs it |
|---|---|---|
| Inward (invoices received) | Purchase invoices of inputs on which ITC was availed in the period | Shows the higher-rated inputs that built up the credit |
| Outward (invoices issued) | Sales invoices of the lower-rated (inverted) output in the period | Shows the turnover and tax payable used in the formula |
We have deliberately not reproduced a portal column layout. The RFD-01 screen changes with GSTN updates, and the rule fixes only the particulars above. In practice each row also carries taxable value and tax by head, because Statement 1 draws its totals from these rows.
Statement 1: the Rule 89(5) formula
Rule 89(5), as amended by Notification 14/2022-CT, gives the maximum refund:
Maximum refund = {Turnover of inverted rated supply × Net ITC ÷ Adjusted Total Turnover} − {Tax payable on such inverted rated supply × (Net ITC ÷ ITC availed on inputs and input services)}
Here Net ITC means ITC availed on inputs during the relevant period. Input services are not part of Net ITC, but they do appear in the denominator of the second bracket. The Supreme Court in VKC Footsteps upheld the exclusion of input services.
Illustration (round figures). A manufacturer's output is taxed at 5%, and its main inputs at 18%. In the quarter:
| Item | ₹ lakh |
|---|---|
| Turnover of inverted rated supply (= adjusted total turnover) | 100.00 |
| Tax payable on that output at 5% | 5.00 |
| ITC on inputs (Net ITC) | 10.80 |
| ITC on input services | 1.00 |
| ITC availed on inputs and input services | 11.80 |
First part: 100 × 10.80 ÷ 100 = 10.80 Second part: 5.00 × (10.80 ÷ 11.80) = 4.58 Maximum refund ≈ ₹6.22 lakh, subject to the balance available in the electronic credit ledger.
Every figure in that table should trace back to rows in Statement 1A and Annexure B. If Statement 1A lists outward invoices worth ₹98 lakh while Statement 1 uses ₹100 lakh, expect a deficiency memo. The rates here are illustrative. Check the current rate schedule for your goods. More worked cases are in inverted duty refund formula: calculation examples, and you can test your own numbers in the GST refund calculator.
Eligibility points that Statement 1A exposes
Statement 1A puts your inputs and outputs side by side. An officer will use it to test these conditions:
- Nil-rated or exempt output. No refund where the output is nil-rated or fully exempt.
- Same goods, rate change. Circular 135/05/2020-GST said there is no inverted duty refund where input and output are the same goods and the credit piled up only because the rate changed over time. Circular 173/05/2022-GST modified this to allow refund where the output rate is lower at the same point in time because of a concessional notification.
- Restricted goods. Notification 5/2017-CT(R), as amended, lists goods for which inverted duty refund is not allowed. Check your output against the current list.
- Multiple inputs. Courts (for example, Nahar Industrial Enterprises, Rajasthan HC) have held that the refund cannot be refused just because the rates are "more or less the same" or several inputs are used. What matters is whether credit accumulated because inputs are taxed higher.
- Timing of entitlement. Following Gemini Edibles (SLP dismissed 09.05.2025), entitlement attaches when the credit accumulates, not when the claim is filed. A later restriction should not reach back to earlier periods.
Provisional refund for inverted duty: not yet
The Finance Act 2026 extends section 54(6) provisional refund (90%) to inverted duty refunds. That amendment has been enacted but is not yet in force, because it applies from a date still awaiting notification. Until then, inverted duty claims are sanctioned in full only through RFD-06 after scrutiny. The 60-day sanction timeline and 6% interest on delay under section 56 apply.
Related statements: Statement 3 for LUT exports and Statement 5 for SEZ supplies.
Need help with an inverted duty claim?
Inverted duty refunds are won or lost on reconciliation: GSTR-2B against Annexure B, Statement 1A against GSTR-1, and Statement 1 against both. If a claim has come back with a deficiency memo, or you want to file for several quarters of post-rate-cut accumulation, see our GST refund service for inverted duty structure. We prepare the full statement set and follow the claim through to sanction.
Key takeaways
- Statement 1A is required by Rule 89(2)(h). It lists the number and date of invoices received and issued in the tax period.
- Statement 1 applies the Rule 89(5) formula. Net ITC covers inputs only, and input services sit only in the denominator of the second part.
- No refund where output is nil-rated or fully exempt, for notified restricted goods, or (subject to Circular 173) where input and output are the same goods.
- Statement 1A, Statement 1, Annexure B, GSTR-1 and GSTR-2B must all reconcile.
- Provisional refund for inverted duty is enacted by the Finance Act 2026 but awaits notification.
Read next
- Inverted duty structure refund: when input exceeds output
- How to file an inverted duty refund on the GST portal
- ITC accumulation after GST 2.0 rate cuts: refund route
- Inverted duty refund: Circular 181 cannot override section 54(3)
Disclaimer: Positions stated as on 30 September 2026, based on the CGST Act and Rules as amended, the Finance Act 2026, and the ICAI Handbook on Refunds under GST (January 2026). Verify current notifications before filing.