Refund of GST paid under RCM

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This query is : Resolved

Quick Summary

If you paid GST under the Reverse Charge Mechanism (RCM) on a lease premium for a long-term land lease, and the lease was subsequently cancelled and the premium refunded, you can claim a refund of the GST paid. The refund application should be filed online via the GST portal under Section 54 of the CGST Act, citing excess payment of tax. Ensure you submit all supporting documents, including the lease agreement, cancellation deed, and proof of lease premium refund. The claim must be filed within two years from the relevant date, and it's advisable to file after receiving the refund of the lease premium itself.

Nimit Mundhra

Nimit Mundhra (Querist)
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18 September 2020 GST was paid on reverse charge basis on long term lease of land from a Government agency. However, after payment of GST, the lease was cancelled. Can refund application be filed for the amount of GST paid under RCM earlier in this case? If so, what is the procedure.

Lekhraj sood

Lekhraj sood (Expert)
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18 September 2020 YES YOU CAN CLAIM THE REFUND OF EXCESS PAYMENT OF TAX UNDER SECTION 54.THE REFUND IS TO BE FILED ONLINE ON GST PORTAL.YOU HAVE SUBMIT ALL THE RELEVANT DOCUMENTS IN SUPPORT OF YOUR CLAIM LIKE CHALLAN FOR PAYMENT OF TAX,ORIGINAL LEASE,CANCELLATION OF DEED, LESSOR INVOICE FOR LEASE RENT ETC.
WAS THE LEASE RENT PAID IN ADVANCE? HAVE YOU RECEIVED THE REFUND OF LEASE PAYMENT?

Nimit Mundhra

Nimit Mundhra (Querist)
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18 September 2020 Yes lease premium was paid in advance according the terms. I have not yet received the refund of lease premium.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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20 July 2025 Thanks for the info! Since the GST was paid under Reverse Charge Mechanism (RCM) on lease premium that was later refunded due to cancellation of lease, here’s what you should do:

Can you claim refund of GST paid under RCM?
Yes, you can claim a refund of GST paid on the lease premium under RCM, if the lease was cancelled and the premium refunded.

How to proceed?
Refund claim under Section 54 of the CGST Act:
File the refund application online on the GST portal.
Select the appropriate reason for refund (excess payment of tax).
Provide details of GST paid under RCM (challan details, payment dates, etc.).
Attach supporting documents:
Original lease agreement.
Cancellation deed/agreement.
Proof of refund of lease premium received from the lessor.
Invoice or other documents showing payment of lease premium and GST payment challan.
Timing of refund:
Refund claims should be filed within 2 years from the relevant date (usually the date of payment of tax or date of refund of lease premium).
Since refund of lease premium is awaited, the refund claim can be filed once you receive the refund of the lease premium.
Follow up:
If the refund of lease premium is delayed, coordinate with the lessor to get it processed.
Once you receive the refund of lease premium, file the refund claim promptly.
Summary
You paid GST under RCM on advance lease premium.
Lease was cancelled, and lease premium refunded by the lessor (not yet received).
Once you get refund of lease premium, file refund claim on GST portal with all documents.
Refund claim is for excess tax paid (GST under RCM) on the cancelled lease premium.

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