Hello,
In November 2017, the Assessee mistakenly paid GST of Rs. 8,75,000/- instead of Rs. 87,500/-. The GST was initially paid from the utilization of ITC. The assessee re-claimed ITC of Rs. 787,500.
If a refund application were filed, would the department also credit the excess ITC back to the credit ledger only as it was paid trough ITC.
The adjustment of excess paid GST reclaimed against ITC is a revenue-neutral transaction, and there is no loss of revenue.
Now, the department has issued a Show Cause Notice (SCN) asking the assessee to pay the adjusted ITC of Rs. 787,000/-
Whethger adjustments be made without claiming a refund for the excess GST?
Assessee's Excess GST Payment and ITC Adjustment Sparks Show Cause Notice; Calls for Leniency and Procedural Review An assessee mistakenly paid excess GST of Rs. 8,75,000 instead of Rs. 87,500 in November 2017, using Input Tax Credit (ITC). The excess amount of Rs. 7,87,500 was reclaimed as ITC in December 2017. A Show Cause Notice (SCN) was issued by the department, demanding repayment of the adjusted ITC. The discussion highlights procedural errors and the need for leniency due to the early GST implementation stage. It also references a circular and suggests that adjustments should have been claimed as a refund per guidelines. The correct figures were later disclosed in the annual return for 2017-18. (AI Summary)
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