Budgetary support is limited to cash tax paid after input credit exhaustion; reverse charge tax and quarter-end credit balances are excluded.

Under the budgetary support scheme, only tax actually paid in cash after exhaustion of available input tax credit on the prescribed quarterly basis was eligible for support. Tax paid under reverse charge was treated as payment of another person's liability and not as eligible cash tax for the scheme, so the refund claim on that basis was inadmissible. A claim based on the quarter-end balance of unutilized credit, including transitional credit, also failed because entitlement depended on the cash payment position after credit exhaustion for the relevant quarter. The rejection of the disputed refund claims was upheld.

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Issues: (i) Whether tax paid under Reverse Charge Mechanism was eligible for budgetary support; and (ii) whether refund could be claimed on the basis of unutilized credit standing at the end of the quarter instead of on the quarterly cash tax actually paid after exhaustion of input tax credit.

Issue (i): Whether tax paid under Reverse Charge Mechanism was eligible for budgetary support.

Analysis: The claim under the scheme was confined to tax paid in cash on the specified goods after utilization of input tax credit. Tax paid on reverse charge basis was treated as tax paid on behalf of another person's liability and was available as credit in the tax account, rather than as forward-charge outward tax paid in cash for the purposes of the scheme. The scheme therefore did not extend budgetary support to such payment.

Conclusion: The claim for budgetary support on tax paid under Reverse Charge Mechanism was not admissible and was rightly rejected.

Issue (ii): Whether refund could be claimed on the basis of unutilized credit standing at the end of the quarter instead of on the quarterly cash tax actually paid after exhaustion of input tax credit.

Analysis: The scheme required claims to be filed on a quarterly basis and limited support to tax actually paid in cash after exhaustion of input tax credit. The presence of credit in the electronic credit ledger at the end of the quarter, including transitional credit, meant that the cash payment for that quarter could not be treated as fully eligible for support until credit stood exhausted in accordance with the scheme. The subsequent utilization of transitional credit did not alter the position for the relevant quarter.

Conclusion: Refund on the basis claimed was not admissible, and the rejection of the balance claim was correct.

Final Conclusion: The appeal failed, the rejection of the disputed refund claims was sustained, and the sanction order was upheld.

Ratio Decidendi: Under the budgetary support scheme, only tax actually paid in cash after exhaustion of available input tax credit on the prescribed quarterly basis is eligible for support, and tax paid under reverse charge or a quarter-end credit balance does not expand the entitlement.

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