No dues Certificate from GST Department

[Ashiesh Prremji]

Dear Experts,

I have two queries...

First one is regarding 'No dues Certificate' from GST Department which is required for Company's liquidation process. Whether we need to submit any application to PO to get that or Cancellation certificate should work as NDC ?

Second one is regarding ITC which are lying in ECL of Company, is any treatment required with ITC if we process to cancel GST Registration ?

Thank You !

[KASTURI SETHI]

Here NDC means clean chit from the department. The department does not give such clean chit. Registration is cancelled only after all the dues are cleared and all issues are settled and audit is conducted. Despite this cancellation certificate cannot be treated as NDC.

Regarding the second issue, in this scenario, in pre-GST era refund was allowed in cash via CESTAT judgement. In GST regime, there is no such provision for refund but voice should be raised taking shelter of case laws pertaining to Central Excise. Tax paid invoices are like cheques and ITC lying as unutilised in ECL is company's asset. In the event of closure, refund in cash is deserved.

[Ganeshan Kalyani]

In ideal scenario, there cannot be any input tax credit balance lying unutlised when all the stocks are sold out. This is for the reason that the outward supply value would be on a higher side than the inward supply value. That means the input tax credit shall get utilised against the GST payable on a higher value/sale value.

Even then there can be a situation when GST liability was paid in cash /Electronic Cash Ledger instead of offsetting it against input tax credit/Electronic Credit Ledger. Unfortunately there is no provision of claiming refund of unutilised input tax credit.

I fully agree with the view of Sri Kasturi Sir that taxpayer need to request GST Council/Govt. to provide facility to claim refund of the input tax credit available in Electronic Credit Ledger on account of closure of the unit and no stock is lying in it.

AI Summary

No dues certificate: cancellation certificate is not a clean chit; unutilised input tax credit lacks refund remedy under GST.
The GST department does not issue a separate No Dues Certificate; registration cancellation after clearance and audit is not a clean chit, and a cancellation certificate cannot be treated as departmental clearance. Unutilised ITC in the Electronic Credit Ledger is treated as the taxpayer's asset, but current GST law lacks an explicit refund mechanism for such balances on closure, prompting requests for policy or regulatory relief.