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GST RCM PAID UNDER WRONG HEAD

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Ankita Jhunjhunwala

Fresher

30 Points Posted on 07 November 2024

A taxpayer had paid GST under reverse charge for financial year 2018-19 under CGST/SGST.
Taxpayer had also claimed the same reverse charge paid as input tax credit in GSTR 3B in the same financial year.
The department issued a show cause notice in 2023-24 demanding IGST as payable on the reverse charge entries.
The assessee has paid the IGST demand in DRC 03.
Can taxpayer claim refund of gst paid under wrong head for CGST/SGST when tax has been paid under correct head IGST ?

Replies (5)

Quick Summary

A taxpayer mistakenly paid GST under reverse charge (RCM) using CGST/SGST instead of IGST for FY 2018-19, and subsequently claimed it as input tax credit. After receiving a show cause notice, they paid the IGST demand. The question is whether they can claim a refund for the CGST/SGST paid under the wrong head. The advice provided suggests that a refund is possible by filing Form GST RFD-01, declaring the erroneous payment, and providing proof of the correct IGST payment, provided all GST refund conditions are met.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 07 November 2024

A complex GST scenario! In this case, the taxpayer paid GST under reverse charge for FY 2018-19 under CGST/SGST,

To answer your question: -

The taxpayer can claim a refund of GST paid under the wrong head (CGST/SGST) since they have already paid the correct IGST. -

However, they need to meet the conditions for refund claim as per GST regulations. -

The taxpayer should file a refund application in FORM GST RFD-01, selecting the option "Refund of excess payment of tax" and providing relevant details. -

They should also provide a declaration that the excess payment was made under the wrong head and that the correct IGST has been paid.

Additionally, keep all relevant documents and records ready to support the refund claim.