Refund of GST Paid on RCM for F.Y.17-18

[NISHANT SHAH]

Dear Experts,

We had paid GST as per RCM for F.Y.17-18 while filling annual return GSTR-9 through DRC-03.

My first question is that ,I want to know whether am i eligible to get refund of this tax by virtue of Section 54(3) of CGST Act read with Rule-89 of CGST Rules 2017. If so, what is time limit within which we may apply for refund?

Our tax consultant has submitted above comments in GSTR-9C (in Auditor's comment) stating that assessee is eligible to get above refund but ,

Rule 89(3) of CGST Rules, 2017 also provide that where the application relates to refund of input tax credit, the electronic credit ledger shall be debited by the applicant in an amount equal to the refund so claimed. But while filling GSTR-3B, our CGST Credit Ledger balance automatically gets fully utilised by virtue of set-off rules so we would not be able to hold balance equivalent to CGST Refund amount which we are going to apply of RCM Paid tax. Now, how to claim refund of tax paid?

[Ganeshan Kalyani]

How a refund be claimed of the liability paid under rcm. RCM is a liability which has to be paid.

[Alkesh Jani]

Shri

When payment of DRC-3 was made?

[NISHANT SHAH]

Sir,

We paid Tax through DRC-03 on 13.02.2020

[Alkesh Jani]

Shri Nishant,

Now please elaborate, on what ground or for which activity auditor concluded that tax paid can be refunded.

Secondly, Section and Rules will come into play after we conclude the above.

[NISHANT SHAH]

Dear Kalyaniji,

Then what Rule 89(3) talks about, for refund of unutilised ITC? If you read this rule read with sec. 54(3), it says it clearly about refund and our legal consultant is of same view. But I'm not clear about this provision. Detail explanation is required for this issue.

& My question is clear about how can i get tax refund of this RCM Paid?

[NISHANT SHAH]

Dear Alkesh Sir,

I don't understand this section and rule clearly but my question is clear as to how can i get credit of this tax or get refund??

If I'm eligible to get my tax paid back, how can i get it and if not, then let me know reason of it with time barred limit provision for not claiming same credit?

[NISHANT SHAH]

Dear Alkesh Sir,

This is word to word comment made by our auditor.

"Though as per provisions of Sec 9 of the GST Act, tax payer is entitled to get credit of RCM Paid within prescribed time limit, here, since the tax payer has paid RCM at the time of filing
annual return and reconcillation statement, tax payer is advised to file refund application U/S 54Rule 89 of the GST act and rules."

[Alkesh Jani]

Shri Nishant,

As per the note of the auditor, what I understood is that You have already paid the tax under RCM for the relevant period and the amount paid by you by DRC-03 is in excess and for this you were advised to file refund under Section 54(1) of CGST Act. (any other amount).

The time limit is of two years from the date of payment. In terms of Rule 89(2)(k) a statement showing that excess payment was made is required to be submitted.

Thanks

[NISHANT SHAH]

Dear Alkesh Sir,

We had not paid Tax on RCM on transportation services availed by us for the period 01.10.2017 to 31.03.2018 in the impression that tax is not payable by us but later on, query raised in audit and they advised us to pay Tax on RCM while filling Annual Return and hence we paid tax and they suggested us to get refund of same considering above rules & section.

[Alkesh Jani]

Shri Nishantji,

I think now the proper query is put forth. In this case, as you have paid the tax under RCM for transportation of goods at the time of filing annual return, ITC can be availed within the limitation period provided under Section 16(4) of CGST Act. Moreover, No refund can be claimed in this regards.

However, to contest is one’s own choice.

This in my view.

Thanks

[NISHANT SHAH]

Sir, but how can i validly claimed itc since it's time period already lapsed since I am going to get credit of F.Y.17-18, how can i get it?

[Alkesh Jani]

Shri Nishantji,

I already said that ITC can be claimed as per the provisions of CGST Act. if the time has lapsed, ITC also gets Lapsed.

Thanks

[NISHANT SHAH]

Ok sir.

Thanks for your valuable opinion

[SHARAD ANADA]

Refer press release Dated 03/07/2019 para G. You may pay RCM of 17-18 in 18-19 and claim ITC for the same in 18-19. But you have paid it through DRC 03 as your liability U/s. 9(3) of CGST Act 2017. Amt paid through DRC 03 will not reflect in your credit ledger hence you cannot claim ITC for the same. At same time you not eligible for refund. Now it becomes your cost.

[NISHANT SHAH]

Ok Sharadji, Thanks for your valuable suggestion.

[DR.MARIAPPAN GOVINDARAJAN]

Discussions are so elaborate so as to clear the query.

[Bhavika Chothani]

RCM Liability paid via DRC-03 does not get credited to ITC Ledger. Hence you cannot take ITC. For claiming refund since this is related to the liability which you have not paid earlier, you cannot claim refund too.

[VenkatanarasimhaRao Murala]

Dear sir we paid gst on agriculture product under rcm and climed ITC during 2017-18 , during GST audit conducted by department , the officer is saying that u cannont pay gst on agriculture product and ITC Canoot be climed u should apply for refund , and intended to dissallow above ITC climed and pay entire tax with interest and penalty.

My question is can we apply refund now

[Chandani Nawalkha]

Any excess tax deposited with the department is refundable. The relevant date for period of limitation in such cases shall be date of payment of tax.

[NISHANT SHAH]

Dear Mam,

I shttps://www.taxtmi.com/forms?id=1278I have 2 point which must be cleared

1)Whether time limitation of refund is applied from date of payment of tax or from date of original due date of payment of tax ??

2)If I still agree with your views for claiming refund from the date of payment of tax, second question arised for claming refund of payment of tax made by DRC-03. How can I get refund of tax paid through DRC-03??

Please elaborate. Waiting for views of other experts also.

Thanks

AI Summary

Refund of GST paid under reverse charge: liability payments via the liability form generally cannot be converted to ITC or refunded. Payments of GST made under the Reverse Charge Mechanism via the liability payment form (DRC-03) discharge the RCM liability and are not credited to the electronic input tax credit ledger, so they generally cannot be converted to ITC. Excess tax deposited may be refundable, with the limitation period reckoned from the date of payment, but taxpayers should file a statutory refund application supported by a statement evidencing excess payment; if the ITC claim period has lapsed, credit is forfeited and refund options are limited.