Paying excess IGST

[Rajesh Kumar]

Sir , please inform what will be consequences when an exporter paying IGST on his goods on export @12% instead of 5% and taking IGST refund from Customs. Actually he is paying excess duty than applicable on the rate and taking IGST refund.

[Rajagopalan Ranganathan]

Sir,

As far as export of goods is concerned whatever IGST paid by exporter the same will be refunded. Hence the question whether you have paid excess IGST is not the concern of the Customs Officer who sanction the refund on line. Moreover the allegation that to claim more refund you have paid excess IGST will not hold water since whatever IGST paid by you will be refunded to you. Therefore you need not worry about payment of IGST at higher rate.

[KASTURI SETHI]

Such practice is legally wrong and should be stopped immediately. The department may consider such excess payment as modus operandi to encash accumulated ITC. You cannot pay any tax on your own volition.

You cannot pay tax more than than prescribed rate. You may invite interest and penalty.

[Atul Rathod]

Agree with Kasthuri Ji. Though there are favorable judicial pronouncement in Excise but in GST the said practice could lead to litigation.

[Adarsh Sharma]

Agree with Kasthuri Ji, department will take a stand that to encash the accumulated ITC you have purposefully paid IGST at higher rate and they will recover such excess along with interest

[Rajendra Prasad]

Dear Mr Rajesh,

Please stop this practise immediately, Agree with Kasthuri Ji

AI Summary

Payment of excess IGST may prompt recovery and penalties despite refunds being processed by customs. An exporter who remits IGST at a higher rate may obtain an online refund of the IGST actually paid, since Customs processes refunds for IGST remitted. However, voluntary overpayment is legally improper; authorities may treat excess payment as an attempt to encash input tax credit and pursue recovery with interest and penalty, exposing the exporter to assessment and litigation.