Refund of GST paid erroneously

[Ethirajan Parthasarathy]

As per Circular No.177/09/2022 dt:03/08/2022, it is clarified that no GST is attracted if plots are sold after completing development works. In many cases, layout developers have collected and remitted GST on sale of plots done even after development.

Similarly there are instances that layout developers have paid GST after receipt of notice from GST dept. even for sale of developed plots.

Is there any provision claiming refund of GST erroneously paid due to wrong understanding of Law.

[Shilpi Jain]

Refund will be available u/s 54 of CGST Act. This would be a payment which is not tax and thereby as per article 254 of the CoI department cannot retain it. No tax can be collected without authority of law.

Refund can be claimed. Just ensure that it is claimed within time limit.

[Ganeshan Kalyani]

In my view the tax that is collected from customer and paid to govt. cannot be taken back as refund. It would be unjust enrichment.

[Ganeshan Kalyani]

Going forward you need not charge tax based on said circular.

[PAWAN KUMAR]

Dear sir,

As per my view you may apply for refund within 2 years from the date of payment of tax(relevant date) under section 54(8)(e). Refund can be applied but it will be sanctioned to CWF as per my view since you have passed on the GST to your respectively customers. The circular clarified that sale of developed lands also cover under sale of land and neither supply of goods nor supply of service under schedule-III  CGST, Act, 2017.

[Ethirajan Parthasarathy]

The idea of getting refund is not to retain it, but to return to customers who have paid the GST earlier.

If the refund will be credited only to CWF, the good intention of the registered person is not served.

Thanks to everyone who responded to my query.

[Amit Agrawal]

W.r.t. last post by the querist about 'good intention' of the tax-payer etc., kindly note that bar on unjust enrichment (& transfer of amount to 'consumer welfare fund') does not apply to end-consumer. And such end-consumer can directly apply for refund to the jurisdictional officer where tax-paper had paid taxes erroneously.

So, such tax-paper can advice & assist its customers (presumably, end-consumers, who has not availed ITC against taxes so charged earlier and borne cost thereof themselves) to get refund of taxes paid erroneously.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

going ahead, the 48th GST Council Meeting has recommended for application of refund by unregistered person. Therefore, the end customer (presumably unregistered) can apply for refund directly, once the modalities are updated in the GSTN portal

AI Summary

Refund of erroneously paid GST can be claimed and returned to affected purchasers; unregistered buyers may apply directly. Refund is available for GST paid on sale of developed plots where tax was collected or remitted by mistake; such amounts are not lawfully retainable and must be claimed within the statutory time limit. Issues of unjust enrichment and possible routing of refunds to a consumer welfare fund arise when tax has been passed to customers. End-consumers who bore the cost may apply for refund directly and registered suppliers may assist; administrative changes are recommended to allow unregistered buyers to claim once portal procedures are updated.