REFUND U/S 77 OR U/S 54

[AJIT Tiwary]

Dear Expert,

i have filed my GSTR-1 for the month of july 2017 correctly. all the invoices shows the liability under IGST but when i have to pay the gst through GSTR-3B i wrongly pay the tax under CGST and SGST. now, i got notice ASMT-10 it shows that i have not pay the gst liability as per GSTR-1 which shows IGST liabilty.

Further, i paid the IGST and going to apply for refund which i have wrongly paid under CGST and SGST but when i am going to file statement-6 we got two column 1. transaction considered previously and 2. transaction considered subsequently.

i filled all detail as require the column (transaction considered previously) as i filed GSTR-1 which is correct as i said above. but when i go to fill transaction considered subsequently i found that my my both column will be same and refund has not been generated

now i need to know how i go to apply for RFD-01 through statement-6.

[Sadanand Bulbule]

Dear Sir

The tax payer can apply for refund under the category of" Excess payment of tax". If there are any technical problems in applying under the said category, he can apply under "any other" category.

Try once.

[AJIT Tiwary]

Dear Sir,

i already applied in any other but refund has been rejected due to time barred and as per section 54 of cgst act time timit to apply the refund is 2 year from the payment of tax

secondly, when we have made payment in wrong head and got notice then after we have make payment in correct head. my question that before making payment in correct head i am falling under section 77 as tax has been paid in wrong head but when i make payment in correct head it will be considered as excess payment of tax how is it possible.

further, if i apply refund under section 54 as excess payment of tax then 2 years will be counted from which date from payment made in wrong head or payment made in correct head,

further, section 54 cover excess payment of tax and my case has been converted in excess payment of tax as per section 54 from the date of payment made in correct head,

can i go for refund as 2 year has not been time barred from the payment made in correct head??

pls suggest

thanks alot

[Shilpi Jain]

The period of 2 years is to be reckoned from the date of payment of the correct tax as is clarified in Circular No. 162/18/2021-GST, dated 25-9-2021, relevant para extracted below

4.2 The aforementioned amendment in the rule 89 of CGST Rules, 2017 clarifies that the refund under section 77 of CGST Act/ Section 19 of IGST Act, 2017 can be claimed before the expiry of two years from the date of payment of tax under the correct head, i.e. integrated tax paid in respect of subsequently held inter-State supply, or central and state tax in respect of subsequently held intra-State supply, as the case may be. However, in cases, where the taxpayer has made the payment in the correct head before the date of issuance of notification No.35/2021-Central Tax dated 24.09.2021, the refund application under section 77 of the CGST Act/ section 19 of the IGST Act can be filed before the expiry of two years from the date of issuance of the said notification. i.e. from 24.09.2021.

[Sadanand Bulbule]

Dear Sir

I support the legal position expressed by Madam Shilpi ji.

[AJIT Tiwary]

Dear Mam,

my case is different, if i follow section 77 with Circular No. 162/18/2021-GST i need to submit statement-6 for RFD-01 and i filed my GSTR-1 correctly but payment made in wrong head in GSTR-3B now Statement-6 have 2 column first one which shows the transaction previously and second one is transaction subsequently. as i said that i filed my GSTR-1 correctly then my transaction related to previously and subsequently both are same and statement 6 demanded right and wrong transaction then refund has been validated and calculated. in my case both column shows correct transaction and refund became zero

in this situation what we need to do, pls suggest

[KASTURI SETHI]

Sh.Ajit Tiwary Ji,

In this case, Order-in-Original has been passed rejecting refund claim on time-bar basis. So you will have to file an appeal to the Appellate Authority, if you are in a position to prove that the refund claim is not hit by time limitation. It is purely a procedural lapse and technical in nature.

Regarding the error of paying tax under CGST/SGST instead of IGST, this is typographical mistake. This error is the root cause of excess payment of tax. Whether it is CGST/SGST or IGST, this very amount of tax remained Govt.'s kitty.

In the Order, what date was taken for holding time-bar ?

Regarding the problem of Common Portal System, "Subsequently and previously", this is also rectifiable with the co-operation from the officers of Common Portal System via jurisdictional GST Range Officer.

The foundation of rejection of refund claim is technical and the assessee should not suffer due to such procedural/technical/typographical lapses. You can take shelter of case laws.

I also agree with the views of Madam Shilpi Jain.

[KASTURI SETHI]

Also go through the case law of High Court of Andhra Pradesh in the case of M/S. WALCHANDNAGAR INDUSTRIES LIMITED, VERSUS THE ASSISTANT COMMISSIONER (ST) , THE APPELLATE JOINT COMMISSIONER (ST) , THE CHIEF COMMISSIONER OF STATE TAX, THE STATE OF ANDHRA PRADESH, - 2022 (8) TMI 589 - ANDHRA PRADESH HIGH COURT. This case is pro-revenue but refund of IGST was allowed after payment of GST under correct Heading CGST and SGST. IGST was wrongly paid during July, 2017 to June, 2018.

This case law can help you.

[KASTURI SETHI]

Dear Querist,

Notification No.30/12-ST dated 20.6.12 was amended vide Notification No.7/15-ST dated 01.3.2015(effective from 1.4.15) wherein 100% ST is to be paid by Service Recipient Company in respect of Man Power Supply subject to the conditions mentioned under RCM.

[Manoj Kumar]

Dear Experts,

In a similar scenario, my client have paid excess cess value instead of tax amount at the time of filing GSTR-3B during Oct 2017. However while filing annual return they have paid the tax amount under DRC-03 in 2020 and applied for refund of excess. The refund was rejected stating time barred. Any solution to this. Since he came to know the issue only at the time of filing annual return, he applied the refund in 2020. For refund purpose cess has to be treated as tax (as per compensation cess act). Which section the refund to be applied 77 or 54.

[KASTURI SETHI]

Section 77 is not independent of Section 54. See Section 54 (8) (d) of CGST Act. Route is through Section 54 only.

[Manoj Kumar]

Dear Kasturi Sir,

In that scenario,

Whether cess is also covered under section 77;

Whether excess payment of cess identified at the time of filing annual return is eligible for refund within two years from the date of making actual tax payment (March 2020)?

And whether benefit under Circular No. 162/18/2021-GST can be availed so that refund can be applied anytime before 23.09.2023?

AI Summary

Excess payment of tax refund: claimable from the date of payment under the correct head; procedural errors may be rectified administratively. When tax shown as IGST in GSTR 1 was paid under CGST/SGST in GSTR 3B, the taxpayer may claim refund either under Section 77 for tax paid under wrong head or under Section 54 as excess payment; Circular No.162/18/2021 GST instructs that the two year limitation is to be reckoned from the date of payment under the correct head. Portal mechanics (Statement 6 previously vs subsequently) can nullify refund calculation when entries coincide, and procedural rectification via the jurisdictional officer or appellate remedy may be necessary where claims are rejected as time barred.