RECOVERING GST PAID AT HIGHER RATE

[VIPUL JHAVERI]

Dear Experts

pl. share your valuable views and guidance

Buyer - B was charged GST at 12% by Seller- S by mistake, while later on it is found that actually this product is with NIL rate of tax B paid off invoice and claimed ITC credit and S paid off GST collected to govt, now during GST audit of B - GST officer found ITC credit wrongly availed as there is NIL rate of tax and asked B to pay off GST for availing ineligible ITC credit of purchase of nil rated product and B has paid of the same demanded by govt now B trying to recover wrong charged GST from S, S is not willing to issue credit note, informing that matter is very old of FY 18-19 and they can not get back amount paid to govt under this circumstance can B apply for refund from Govt as he has paid undue tax as neither seller is liable to pay nor buyer is liable to pay any GST on nil rated product under "undue enrichment" to be refunded back to the payer/suffer, here to Buyer B

AI Summary

Undue GST refund: buyer may claim refund from government for tax never payable, with litigation likely required.
Buyer paid GST charged erroneously on a nil-rated product, availed ITC, and later paid a departmental demand; practitioners advise filing a refund claim against the government on the ground that the tax was never payable in law and limitation should not bar relief, or alternatively reversing ITC and seeking refund, while recovery from the supplier may be contested and likely requires litigation.