GST refund of surplus TDS in electronic cash ledger requires reconsideration after later circular clarifies permissibility.

Refund of surplus TDS/TCS lying in the electronic cash ledger must be examined under the GST refund scheme when a later circular clarifies that such refund is permissible under section 54(1) read with section 49(6) of the CGST Act, 2017. Where refund was earlier rejected on unjust enrichment grounds, the prior rejection requires reconsideration in light of the subsequent clarification, and the claim cannot be treated as finally concluded without fresh examination.

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Issues: Whether the rejection of refund of TDS amounts lying in the electronic cash ledger required interference and reconsideration in the light of the later GST circular.

Analysis: The petitioner had sought refund of the surplus TDS amount remaining in the electronic cash ledger after discharge of tax liability. The refund claim had been rejected on the ground of unjust enrichment, and the appellate authority had affirmed that view. The later circular issued by the Central Board of Indirect Taxes and Customs clarified that refund of TDS/TCS amounts deposited in the electronic cash ledger is permissible in accordance with the proviso to sub-section (1) of section 54 read with sub-section (6) of section 49 of the Central Goods and Services Tax Act, 2017. In that background, the earlier orders required reconsideration.

Conclusion: The rejection orders were set aside and the matter was remanded to the respondents for fresh consideration in the light of the circular.

Final Conclusion: The refund dispute was not finally decided on merits, and the competent authorities were directed to reconsider the claim afresh within the stipulated time.

Ratio Decidendi: A refund claim relating to surplus TDS/TCS lying in the electronic cash ledger must be reconsidered where a subsequent binding circular clarifies permissibility of such refund under the GST refund scheme.

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