Excess Tax Paid In A Financial Year

[Pradeep Singhi]

While filing GSTR-3B for F.Y 2018-19, we have paid excess GST by utilising ITC only.

Now,

1. how can we adjust the same? or

2. If we are not able to adjust the same in subsequent return due to Nil turnover then how to adjust?

3. If we cannot adjust then how to claim refund?

[KASTURI SETHI]

You have hobson's choice.

You can apply refund under Section 54 (8)(e) of CGST Act but refund will be allowed by way of re-credit into your Electronic Credit Ledger Account. Mention the reason against Serial No.7 (j) &(k) of Form GST RFD-01. Cash refund is not admissible on the ground that as per Section 16(1) of CGST Act ITC is to be utilized in the course of business or furtherance of business.

Other routes on the basis of case laws are prone to litigation. There are only two or three case laws wherein cash refund was allowed because of closure of the factory. In the letter and spirit of Section 16, cash refund is not admissible because utilization is the statutory requirement.

AI Summary

Refund under Section 54(8)(e) results in re credit to the Electronic Credit Ledger; cash refund generally unavailable.
Excess GST paid by utilising ITC can be claimed under Section 54(8)(e) of the CGST Act and will be re credited to the taxpayer's Electronic Credit Ledger; applicants should state the reason on Form GST RFD-01 (serial 7(j) and 7(k)). Cash refund is not ordinarily available because Section 16(1) requires ITC utilisation in the course or furtherance of business; case-law permitting cash refund is limited and other routes risk litigation.