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Refund due to change in GST Rate Tobacco Products

387 views 2 replies

Mehul Tailor

38 Points Posted on 17 February 2026

WE ARE TOBACCO PRODUCT RETAILER. WE HAVE PAID GST TAX (GST+CESS) 1% AS PER RULE 86(B) NOW GOVERNMENT HAS CHANGED GST TAX. AND ABOLISHED CESS. WE HAVE EXCESS TAX CREDIT ON GST PORTAL. CAN WE CLAIM REFUND ON 1% GST+CESS PAID ON PREVIOUS PERIOD RETURN DUE TO CHANGE IN GST RATE ? OUR CASH PAYMENT CONVETRED IN TO CREDIT.

Replies (2)

Quick Summary

Refund of 1% GST/cess paid under Rule 86B isn't allowed due to rate change. Unused cash ledger balance can be refunded, but utilized amounts can't. Compensation cess credit can't be refunded and may lapse unless notified.

Aashok F C Advisory

Finance & Compliance Consultant | FP

362 Points Posted on 18 February 2026

No, you generally cannot claim a direct cash refund of the 1% GST/Cess paid under Rule 86B simply because the tax rates changed or cess was abolished. However, that "excess credit" sitting in your portal isn't necessarily lost.

Sandhya Garg

Finance Consultancy Services

179 Points Posted on 18 February 2026

Compensation Cess credit:

Can be used only against Compensation Cess liability
If cess is abolished, unused credit generally lapses
Refund is NOT allowed unless Government issues special notification.

If the 1% amount is lying in your Electronic Cash Ledger as unused balance, then you can claim refund of that unused cash balance. But if it was already utilized against tax liability, refund is NOT allowed.