Repaid GST Refund Must Be Re-Credited to Electronic Credit Ledger: Madras HC

Vinayak Electricals Vs Commercial Tax Officer/State Tax Officer (Madras High Court)

Summary: The Madras High Court disposed of a writ petition filed by Sri Vinayak Electricals seeking re-credit of Input Tax Credit (ITC) of Rs.3,01,903/- for assessment year 2018-19 to its electronic credit ledger. Pursuant to an earlier remand by the High Court, the respondent had heard the matter and allowed the petitioner’s ITC claim on 25.07.2025. The petitioner thereafter applied for and was granted refund of Rs.3,01,903/-. Since the amount ought not to have been refunded to the petitioner’s bank account, the petitioner was subsequently called upon to repay it. The petitioner repaid the refunded amount along with interest and approached the High Court for restoration of the amount to its electronic credit ledger. TaxGuru has separately published CBIC’s circular on re-credit to the electronic credit ledger.

The respondent submitted that Rs.3,01,903/- would be re-credited to the petitioner’s electronic credit ledger provided the petitioner filed an application for that purpose. The High Court observed that, pursuant to the order dated 25.07.2025, the petitioner was entitled to ITC. Although a refund had been made on 08.09.2025, the petitioner was asked to repay it because the matter pertained to ITC, and such repayment had been made. The Court held that the petitioner was undoubtedly entitled to the amount by way of re-credit to the electronic credit ledger. It permitted the petitioner to file an appropriate application for re-credit of ITC of Rs.3,01,903/- within fifteen days from receipt of the order and directed the respondent to re-credit the amount within fifteen days thereafter. No order was made as to costs. A separate TaxGuru report discusses a Delhi High Court ruling on re-credit of ITC.