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 Adjustment for Excess GST via ITC for FY 2018-19: Apply Under Section 54(8)(e) CGST Act. A user inquired about adjusting excess GST paid through ITC for the financial year 2018-19, particularly when facing nil turnover and seeking a refund. The response advised applying for a refund under Section 54(8)(e) of the CGST Act, which allows re-credit to the Electronic Credit Ledger. It was noted that cash refunds are generally not permissible due to statutory requirements under Section 16(1) of the CGST Act, which mandates ITC utilization in business operations. Alternative methods based on case law could lead to litigation, with cash refunds rarely granted except in cases like factory closures.