The Tool Desk
Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Use Rule 89(4) when your claim is for eligible zero-rated supplies made without payment of tax under a bond or letter of undertaking (LUT). Use Rule 89(5) when unutilized input tax credit (ITC) has accumulated because of an inverted duty structure. The nature of the supply or the reason for the accumulation determines the formula; the rule number by itself does not establish eligibility.
The two calculations are not interchangeable. Rule 89(4) uses ITC on inputs and input services as Net ITC. Rule 89(5) uses ITC on inputs for Net ITC and then applies a separate, proportionate deduction for tax payable on inverted-rated supplies. Your relevant tax period, filing date and the law in force for that claim also matter.
As an Amazon Associate I earn from qualifying purchases.
At a glance: choose the route that matches the claim
| Question | Rule 89(4) | Rule 89(5) |
|---|---|---|
| What problem does it address? | Refund of eligible ITC relating to zero-rated supplies made without payment of tax under bond or LUT. | Refund of unutilized ITC accumulated because inputs are taxed at a higher rate than the outward, inverted-rated supplies. |
| Core formula | Zero-rated turnover multiplied by Net ITC, divided by Adjusted Total Turnover. | Inverted-rated turnover multiplied by Net ITC, divided by Adjusted Total Turnover, less a proportionate tax-payable deduction. |
| Net ITC for the sub-rule | ITC availed on inputs and input services during the relevant period. | ITC availed on inputs during the relevant period. |
| Special deduction | None in the formula stated in Rule 89(4). | Yes. Tax payable on the inverted-rated supplies is multiplied by Net ITC divided by ITC availed on inputs and input services. |
| Key timing issue | Use the definitions and conditions applicable to the relevant period. | The deduction term was substituted by Notification 14/2022-Central Tax dated 5 July 2022; older claims require a period- and filing-date-specific analysis. |
Both outputs are maximum admissible refund amounts. A formula result is not, by itself, a finding that the taxpayer qualifies or that the entire amount will be sanctioned.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
When Rule 89(4) applies
The qualifying claim
Rule 89(4) is the starting point for a refund claim based on zero-rated supplies made without payment of tax under a bond or LUT. The calculation allocates eligible ITC to the zero-rated turnover for the relevant period. A business that has an inverted rate on its domestic supplies, but has not made the type of zero-rated supply covered by this provision, should not select Rule 89(4) merely because it has unutilized credit.
#1 Best Overall
- Compact & Portable Design: This Small Excel, Word, PowerPoint, & Windows Cheat Sheet Mouse Pad measures 11.8" x 9.8", offering a portable mouse pad. Its compact size fits in bags or laptop cases, suitable for professionals, students, or travelers.
- Multi-Software Shortcut Guide: Featuring essential shortcut keys for Excel, Word, PowerPoint, & Windows, this small mouse pad provides a quick reference for frequently used shortcuts, offering a reference designed to support workflow efficiency
- Smooth & Precise Surface: The finely-textured surface ensures precise mouse control, allowing for smooth and accurate movement during work or gaming sessions.
- Durable & Non-Slip Design: This Multi-Software Shortcut Mouse Pad features stitched edges to reduce fraying. The non-slip rubber base helps keep it securely in place, and the water-resistant fabric allows for easier maintenance.
- Clear Print Quality: Displays high-resolution printing intended to remain legible through regular use and cleaning
First identify the legal basis of the claim and the tax period. Then confirm that the supplies, bond or LUT position, and other statutory conditions match the requirements in force for that period. The rule number is a consequence of that classification, not a shortcut around it.
The Rule 89(4) formula
Refund amount = (turnover of zero-rated supply of goods + turnover of zero-rated supply of services) × Net ITC ÷ Adjusted Total Turnover
This is a ceiling calculated for the relevant period. The current rule text supplies detailed definitions for each turnover component, Net ITC, Adjusted Total Turnover and the relevant period. A spreadsheet that simply inserts total sales and total credit without applying those definitions can produce the wrong ceiling.
Free tools Windows power users keep installed
One-click scans. No signup required.
What counts as Net ITC
For Rule 89(4), Net ITC means ITC availed on inputs and input services during the relevant period. That base is broader than the Net ITC base in Rule 89(5). Capital-goods treatment must be checked separately under the law applicable to the period; the government has announced a future change discussed below, but that change is not already part of the formula as of October 2026.
Build the zero-rated turnover correctly
The rule does not treat every accounting entry as turnover for the ratio. For services, the definition addresses eligible payments received during the relevant period, services completed in the period for which payment was received earlier, and deductions for advances connected with services that remain incomplete during the period. For goods, the current rule text imposes a value limitation. Use the statutory wording for the period rather than a simplified “invoice value” assumption.
Adjusted Total Turnover is also a defined term. Pull it from the same relevant-period framework used by the rule, and retain the working that shows how the denominator was assembled. A change in the denominator changes the refund ceiling even when the zero-rated sales and ITC figures stay constant.
Rank #2
- [MULTIFUNCTIONAL]You'll get 2 pieces computer monitor memo boards that you can stick on the left and right edges of your monitor, and they're the perfect office desk organizers and accessories. Computer monitor side panels desktop organizer are suitable for home work or office,bringing convenience. Desktop memo is used to organize meeting memos, important messages, business cards, planning notes.Paste on the message board to keep track of important things and to-do items to prevent forgetting.
- [🌟HIGHLY QUALITY] The material of computer screen side note holder is transparent acrylic. Durable, simple, stylish, light weight, easy to use, not easy to fall off or break. This cute office supplies for women desk can be used for a long time. This computer desk accessories is waterproof and dirt resistance, and look simple and stylish. The transparent acrylic sticky note holder as cubicle accessories is easy to notice the context of your sticky notes.
- [📋Easy to use] Office must haves cool office gadgets for desk ready to tear, easy to install and remove, not easy to leave traces. You only need to peel off the protective film on the surface of the computer side board memo, wipe off the dust on the edge of the computer monitor, and then stick the desk essentials for women office on the right or left side of the tape, and you're done. A perfect gift for your colleagues, friends or classmates and family members or relatives
- [🏢MULTI-SCENE USE] This desk supplies computer memo board can be applied to home and office, clear your office decor for women, suitable for most computer monitors, screens and cabinets, you can put it where you think, this cute office decor serve as a reminder. Stick on the computer side. It’s a good office gadgets can remind work improve office productivity. Pasted cabinets, dressers, refrigerators, walls, etc as cubicle accessories. To make life more orderly.
- [💌NOTE] The adhesive force of the computer sticky note holder is very strong. It can not be directly pasted on the computer screen. It should pasted on the black edge of the screen. Narrow edge not recommended!!! If you are not satisfied with your purchase, or if the product is damaged or broken in transit, please let us know immediately. We will promptly solve your problem.
When Rule 89(5) applies
The inverted-duty situation
Rule 89(5) addresses accumulated unutilized ITC attributable to an inverted duty structure: the rate on relevant inputs is higher than the rate on the outward supplies to which the accumulation relates. The claim is not selected simply because a ledger shows a credit balance. You must connect the accumulation to inverted-rated supplies and apply the conditions and definitions for the relevant period.
Recommended Free Tools
The current Rule 89(5) formula
Maximum refund = [(turnover of inverted-rated supply of goods and services × Net ITC ÷ Adjusted Total Turnover)] − [tax payable on those inverted-rated supplies × (Net ITC ÷ ITC availed on inputs and input services)]
The second bracket is essential. It is a proportionate deduction, not a subtraction of the entire tax payable. Notification 14/2022-Central Tax, dated 5 July 2022, substituted this deduction term. Any calculation based on an older version that subtracts all tax payable without the proportionate ratio is not the current text for periods to which the amendment applies.
Why the ITC denominators look different
For this sub-rule, Net ITC means ITC availed on inputs during the relevant period. However, the denominator in the deduction term refers separately to ITC availed on inputs and input services. Thus, a business cannot use its total input-and-input-service credit as Net ITC and then assume the deduction disappears. The two roles must be populated separately in the calculation.
Rule 89(5) borrows the denominator and relevant-period definitions used by Rule 89(4). That cross-reference does not merge the two formulas: the claim basis, Net ITC base and deduction remain distinct.
Do these 3 things before closing this tab:
1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsWorked illustrations using hypothetical figures
The following numbers are purely illustrative. They show the mechanics of the statutory expressions, not an eligibility opinion or an estimate of any particular taxpayer’s refund.
Rank #3
- Stay Organized with Ease: Our To Do List Notepad provides multiple sections with plenty of space to jot down all of your important tasks.A versatile office supply perfect for daily task management, helping you keep track of everything that needs to be done and prioritize effectively.
- Achieve Your Productivity Goals: Begin each day on a positive note, reminding you of your potential, strength, and the significance of staying focused on your goals. Our Daily Checklist Notepad is the ultimate tool to streamline your daily planning and elevate your productivity. With a clear and concise overview of your tasks, you can effortlessly prioritize what truly matters and make consistent strides towards achieving your goals.
- Reliable and Stylish: Our to do list planner combines functionality with durability. With a transparent PP cover, the inner pages are well-protected from dirt and wear. Additionally, the back cover is crafted with thick paperboard, offering a stable surface for your writing needs. Each notepad includes 52 pages of high-quality, 100gsm paper, which is thick and non-bleeding, resulting in a smooth and enjoyable writing experience.
- Versatile Use: This daily checklist notepad, suitable for teacher supplies and a wide range of applications, proves invaluable in various settings including work, school, and home. Whether you need to organize your daily tasks, plan a project, or create a grocery list, this notepad serves as the ideal tool. Its compact size ensures easy portability, allowing you to conveniently carry it with you throughout your day.
- Perfect Present for Anyone: Our Daily To-Do List Notepad is the perfect present for those who value organization and productivity. With its stylish design and versatility, this office desk accessory is also a practical addition to school supplies. Suitable for students, professionals, and homemakers alike, it helps keep tasks and priorities in check effortlessly.
Illustration 1: Rule 89(4)
Assume that, after applying the rule’s definitions, a relevant period contains zero-rated goods turnover of ₹80 lakh and zero-rated services turnover of ₹20 lakh. Assume Net ITC (inputs plus input services) of ₹30 lakh and Adjusted Total Turnover of ₹150 lakh.
- Add the two zero-rated turnover components: ₹80 lakh + ₹20 lakh = ₹100 lakh.
- Multiply that turnover by Net ITC: ₹100 lakh × ₹30 lakh.
- Divide by Adjusted Total Turnover: ₹3,000 lakh² ÷ ₹150 lakh = ₹20 lakh.
On those assumptions, ₹20 lakh is the formula’s maximum admissible amount before applying the other statutory requirements and any verification of the figures.
Illustration 2: Rule 89(5)
Assume inverted-rated turnover of ₹100 lakh, Net ITC on inputs of ₹24 lakh, Adjusted Total Turnover of ₹200 lakh, tax payable on the inverted-rated supplies of ₹8 lakh, and total ITC on inputs and input services of ₹30 lakh.
Windows Errors? Fix Them Before They Spread
Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallOutdated Drivers Are Slowing You Down
One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware match- Calculate the first term: ₹100 lakh × ₹24 lakh ÷ ₹200 lakh = ₹12 lakh.
- Calculate the proportionate deduction: ₹8 lakh × (₹24 lakh ÷ ₹30 lakh) = ₹6.4 lakh.
- Subtract the deduction: ₹12 lakh − ₹6.4 lakh = ₹5.6 lakh.
The example demonstrates why omitting the second bracket overstates the result. It also shows why the input-only Net ITC figure and the broader input-plus-input-service denominator must be kept in separate fields.
A decision process for selecting the right formula
- Classify the legal basis. Write down whether the proposed refund concerns zero-rated supplies made without payment under bond or LUT, or unutilized ITC caused by an inverted duty structure. If neither description fits, stop and identify the correct provision before calculating.
- Fix the relevant tax period. Record the months or other period covered by the application and the date on which the application will be filed. Do not mix turnover or credit from different periods unless the rule expressly requires it.
- Choose the rule. Use Rule 89(4) for the qualifying zero-rated-supply route. Use Rule 89(5) for the inverted-duty route. Do not use one formula as a proxy for the other.
- Assemble defined turnover. Apply the period-specific definitions for zero-rated or inverted-rated turnover and for Adjusted Total Turnover. For services, check the payment and advance adjustments; for goods, check the current value limitation.
- Separate the ITC bases. For Rule 89(4), calculate Net ITC from inputs and input services. For Rule 89(5), calculate Net ITC from inputs only, and separately calculate total ITC on inputs and input services for the deduction denominator.
- Apply the formula in full. Include Rule 89(5)’s proportionate tax-payable deduction. Label the result as a maximum admissible amount, not an automatic sanction.
- Test historical-law issues. If the period or application falls around 5 July 2022, analyse the amendment, filing date, limitation rules, jurisdiction and applicable decisions before deciding which version to use.
- Retain the trail. Keep the turnover schedule, ITC ledger extraction, tax-payable computation, bond or LUT evidence where relevant, period reconciliation and the version of the rule relied upon.
How the two routes differ in practice
| Comparison point | Rule 89(4) | Rule 89(5) |
|---|---|---|
| Economic trigger | Zero-rated supply made without payment of tax under bond or LUT. | Credit accumulation attributed to an inverted duty structure. |
| Turnover in the numerator | Zero-rated supply of goods plus zero-rated supply of services, using the rule’s definitions. | Turnover of inverted-rated supply of goods and services. |
| Net ITC | Inputs and input services. | Inputs only. |
| Adjusted Total Turnover | Defined under the Rule 89 framework for the relevant period. | Uses the Rule 89(4) definition by cross-reference. |
| Tax-payable deduction | No equivalent deduction in the stated formula. | Tax payable on inverted-rated supplies multiplied by Net ITC divided by ITC on inputs and input services. |
| Principal historical concern | Period-specific definitions and eligibility. | Whether the 5 July 2022 substituted deduction applies to the claim, especially for older periods and applications. |
The 5 July 2022 amendment and older claims
Notification 14/2022-Central Tax dated 5 July 2022 changed the Rule 89(5) deduction. The amendment matters whenever a claim, period or litigation history overlaps the old and new wording. It is unsafe to apply the amended expression automatically to every historical claim, and it is equally unsafe to assume that every older claim must use the pre-amendment expression.
CBIC Circular 181/13/2022, dated 10 November 2022, treated the amended formula as prospective from 5 July 2022 and said it applied to applications filed on or after that date. The Telangana Commercial Taxes Department’s January 2026 handbook reports a different development: in Ascent Meditech Ltd., Special Civil Application No. 18317 of 2023, decided by the Gujarat High Court on 17 October 2024, the court quashed the circular to the extent it said the amendment was not clarificatory and treated the amendment as retrospective in that case, subject to the limitation discussion in the decision.
Rank #4
- 【Adjustable & Ergonomic】：This laptop stand can be adjusted to a comfortable height and angle according to your actual needs, letting you fix posture and reduce your neck fatigue, back pain and eye strain. Very comfortable for working in home, office and outdoor.
- 【Sturdy & Protective】 ：Made of sturdy metal, it can support up to 17.6 lbs (8kg) weight on top; With 2 rubber mats on the hook and anti-skid silicone pads on top & bottom, it can secure your laptop in place and maximum protect your device from scratches and sliding. Moreover, smooth edges will never hurt your hands.
- 【Heat Dissipation】 ：The top of the laptop stand is designed with multiple ventilation holes. The open design offers greater ventilation and more airflow to cool your laptop during operation other than it just lays flat on the table.
- 【Portable & Foldable】：The foldable design allows you to easily slip it in your backpack. Ideal for people who travel for business a lot.
- 【Broad Compatibility】：Our desktop book stand is compatible with all laptops from 10-15.6 inches, such as MacBook Air/ Pro, Google Pixelbook, Dell XPS, HP, ASUS, Lenovo ThinkPad, Acer, Chromebook and Microsoft Surface, etc.Be your ideal companion in Home, Office & Outdoor.
The handbook is a useful summary, not a substitute for reading the judgment or checking later law. For an older claim, document at least:
Quick wins for a faster PC:
Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →- the tax period to which the accumulation relates;
- the date the refund application was filed;
- the version of Rule 89(5) used in the original calculation;
- the applicable limitation analysis;
- the jurisdiction and any binding or persuasive decisions; and
- whether subsequent orders or notifications have altered the position.
Those facts can lead to a different answer for two taxpayers with similar turnover and ITC but different filing dates or jurisdictions. Describe the result as period-specific rather than announcing a universal prospective or retrospective rule.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Capital-goods ITC: announced change for 1 April 2027
A PIB FAQ published before this article’s October 2026 date reports that capital-goods ITC is to be included, to the extent attributable to the relevant period, in Net ITC for both Rule 89(4) and Rule 89(5) from 1 April 2027. As of 13 October 2026, that was a future-effective announcement, not a component that should be inserted into the current formula.
Before applying the change to a claim, confirm the underlying notification and detailed rules, including how “to the extent attributable to the relevant period” is to be computed. Claims covering periods before 1 April 2027 should not be recalculated as though capital goods were already included under the current wording.
Common errors and how to correct them
Using Rule 89(4) because the business exports
Export activity alone does not answer every eligibility question. Confirm that the claim is for the zero-rated supplies made without payment under bond or LUT and then apply the defined turnover and ITC terms.
Using Rule 89(5) for any unutilized credit
A credit balance is not automatically an inverted-duty refund. Trace the accumulation to the relevant inverted-rated supplies and establish the period-specific conditions before using the formula.
Best Value
- Twin-Ball Design : Hiacry gel pen features a double ball conical tip that reduces writing resistance and provides a stable and smooth writing experience. 0.7mm quick drying black ink ensures no jumping, leakage or seepage.
- Quick-Dry Long Lasting Ink：0.7mm black ink can slide effortlessly, dry immediately, & is not easily dirty. It has a high-capacity reservoir (up to 1300 meters), which is very suitable for left-handed & right-handed users.
- Sleek Design for Journaling & Planning: Engineered with a low center of gravity and precision tip for steady ink flow, these journaling pens excel at note-taking, sketching, planning, and more. They combine stylish pens with top-tier performance.
- Rolling Ball Design：The pocket clip with roll ball design can be easily attached to notebook pockets and binders, in addition, the fidget on the pen clip is also a small toy for your daily thinking to relieve stress.
- Comfortable Non-Slip Grip：The ergonomic pen barrel has a soft rubberized coating for a comfortable, non-slip grip, so you won't get fatigued even after long hours of writing.
Including input-service ITC in Rule 89(5) Net ITC
This is one of the most consequential classification errors. Keep input-service ITC out of the Rule 89(5) Net ITC numerator, while still including the prescribed inputs-and-input-services figure in the deduction denominator.
Leaving out the proportionate deduction
The current Rule 89(5) expression does not stop after the turnover-times-ITC term. Calculate the tax-payable bracket and subtract it. If an old workbook subtracts all tax payable, replace it with the substituted proportionate expression where applicable.
Applying a simplified turnover ratio
Service receipts, earlier payments for completed services, advances for incomplete services and the goods value limitation can change the numerator. Reconcile each component to the statutory definition instead of copying a sales total from the general ledger.
Treating a future announcement as current law
Do not add capital-goods ITC to the current Net ITC calculation solely because a government FAQ reports an effective date of 1 April 2027. Verify the notification and use the rules applicable to the claim period.
Ignoring the filing date in a historical dispute
The circular, amendment, court decision and limitation rules interact. Record the application date and obtain advice on the governing law for the relevant jurisdiction rather than relying on a one-line statement about all pre- or post-amendment claims.
Information to assemble before calculating
- The legal description of the supplies and the proposed refund basis.
- The exact relevant period and application date.
- Zero-rated or inverted-rated turnover split between goods and services where required.
- Adjusted Total Turnover calculated under the applicable Rule 89 definitions.
- ITC on inputs and input services, with input-only ITC separately identified for Rule 89(5).
- Tax payable on the inverted-rated supplies for a Rule 89(5) claim.
- Evidence of the bond or LUT route for a Rule 89(4) claim.
- The notification, circular and case-law position used for any period affected by the 5 July 2022 amendment.
- A reconciliation showing that every formula input belongs to the same relevant period and has not been counted twice.
What the formula can—and cannot—tell you
The arithmetic answers a narrow question: what maximum amount results from the prescribed turnover and ITC relationship for the selected route. It does not replace the legal eligibility test, the statutory definitions, period restrictions, limitation analysis or review of the evidence supporting the figures.
For a current claim, start with the official Rule 89 text in force for the relevant period. For a claim affected by the 2022 change, read the notification and assess the circular and court history in context. For a claim intended for a period beginning on or after 1 April 2027, confirm the final capital-goods provisions before changing the workbook.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
