How to deal regarding IGST paid instead of SGST/CGST on Advance against work contract

[RAJENDRA KHANDELWAL]

In case of a work contract an advance was received but due to oversight IGST has been deposited (In March 2022) instead of SGST and CGST however no invoice has been issued till date. can we claim refund under excess payment category by issuing Refund voucher and make payment today of SGST and CGST without Interest. If anyone has any other option or suggestion please narrate.

[Sadanand Bulbule]

Dear Sir

Please refer Section 77 of the CGST Act read with Section 19 of the IGST Act with corresponding Rule 88B of the GST Rules which are self contained and provide the much needed guidance for your query.

[Sadanand Bulbule]

Dear Sir

in continuation of my opinion, you are requested to refer Rule 87(13) of the GST Rules, which is extracted hereunder for ready reference:

Rule 87 (13) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess in FORM GST PMT-09.]

[Shilpi Jain]

Agreed. In case it is a mere deposit in cash ledger it can be transferred to CGST and SGST head and then return can be filed.

Else, if return is already filed it is a case of wrong tax paid and could consider amending the B2C / B2B entry in GSTR-1 and adjust the liability of IGST paid with any future IGST liability.

If no IGST liability in future, Section 77 of CGST would be the saviour.

[Sadanand Bulbule]

Dear Sir/Madam

1.The subject under discussion is well covered by the division bench judgement dated 08/10/2021 rendered by the Hon’ble Punjab & Haryana High Court in the case of SBI CARDS & PAYMENT SERVICES LIMITED VERSUS UNION OF INDIA AND OTHERS P&H. [2021 (11) TMI 229].

2.The division bench of Hon'ble High Court of Jharakhand in its judgement dated 18/12/2019 rendered in the case of SHREE NANAK FERRO ALLOYS PVT. LTD. VERSUS THE UNION OF INDIA THROUGH THE COMMISSIONER, CENTRAL GOODS AND SERVICES TAX AND CENTRAL EXCISE, RANCHI., THE SUPERINTENDENT, RANGE-I, CENTRAL GOODS & SERVICES TAX AND CENTRAL EXCISE, RAMGARH [2020 (1) TMI 833]

[RAJENDRA KHANDELWAL]

Thanks for your reply and providing relevant judgment. In my case we have also declared the advance amount in GSTR-3B and adjusted the tax hence PMT-09 option is not open for us. Can we go for refund of Advance amount and then apply for refund due to cancellation of contract.

[Sadanand Bulbule]

Dear Sir

Further to give effect to the judgement rendered in the SBI case, the Central Board of Indirect Taxes and Customs looking to such difficulties being faced by the tax payers has issued Circular No.162/18/2021-GST dated 25-09-2021, clarifying the provisions contemplated under Section 77 of the CGST Act and Section 19 of the IGST Act. The CBIC Circular No.162 of 2021 elucidates upon and explains the provisions relating to adjustment/refund of tax paid under wrong head.

You may refer the same.

AI Summary

Wrong-head tax payment remedies: transfer within cash ledger, amend returns, or seek refund under statutory adjustment provisions.
Where IGST was paid instead of CGST/SGST on an advance, the primary remedies are: transfer of the amount within the electronic cash ledger to the correct tax heads via the portal payment-transfer form if unsettled; correction of returns or adjustment of IGST paid against future IGST liability if returns have been filed; and, where adjustment is not feasible, claim refund or adjustment under the statutory provisions for tax paid under the wrong head, as further explained in administrative guidance and judicial decisions.