REFUND OF TAX

Rapidly growing information technology and advancement in business process leads the government to think about seamless and smooth flow of refund of tax under various acts.

Under Goods and Services Act, 2017, Sec 54 specifically talks about ‘Refund of tax’ and there are various sub section under which a registered person shall get an amount of refund. However, there is one sub-section which creates hussle for department to provide refund. Because there is no method or form prescribed under goods and services tax act to give refund.

As Per Sec 54(8)(e) A person shall get refund where” the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person.

On analysis of the above section it clearly seems that the person will get refund if paid a sum of amount of tax whether by way of cash ledger or credit ledger, the same he will get refund under sec 54. But no procedure provided under goods  and services tax act, in case excess amount of tax paid by utilization of amount  through electronic credit  ledger.

However after Notification no. 16/2020 dated 23/03/2020 through CGST 3rd amendment rules, 2020 has added Rule 86(4A) which reads as follow:-

 Where a registered person has claimed refund of any amount of tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT – 03.

Hence after Notification no. 16/2020 dated 23/03/2020 Any person claiming refund for excess payment of tax where tax got utilized thorough electronic credit ledger shall get refund in GST PMT -03

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