Section 77 - Tax wrongfully collected and paid to Central Government or State Government.

Recharacterisation of supply: refund permitted where intra State tax was wrongly paid as central and state tax.

Where a registered person paid central tax and State tax on a transaction treated as intra State but later held to be inter State, the person is entitled to a refund of the taxes paid in the manner and subject to conditions prescribed. Conversely, where integrated tax was paid on a transaction treated as inter State but later held to be intra State, the person is not required to pay any interest on the amount of State tax payable resulting from that recharacterisation.