TaxTMI 
TaxTMI 
A business entity, by mistake, pays RCM tax on municipal tax paid. Is it entitled to set-off this as ITC or should they go for only for refund.
GST Wrongly Paid - ITC
28 Sep 2020 
2 Replies 
1143 Views Asked by
Wrongly paid reverse-charge GST on municipal tax should be reclaimed by refund in cash, not set off as ITC.
Payment of tax under reverse charge on municipal tax made by mistake is not to be treated as eligible for input tax credit but should be reclaimed through a refund claim; Rule 86(4A) and related circulars clarify re credit to the electronic credit ledger where amounts were debited there, and payments made in cash under reverse charge should be refunded in cash. (AI Summary)
Payment of tax under reverse charge on municipal tax made by mistake is not to be treated as eligible for input tax credit but should be reclaimed through a refund claim; Rule 86(4A) and related circulars clarify re credit to the electronic credit ledger where amounts were debited there, and payments made in cash under reverse charge should be refunded in cash. (AI Summary)