IGST - Place of supply in DRC - Jurisdiction under 73

[Padmanathan KV]

Proceedings under section 73 was initiated against a person registered in the State of Kerala for reversing ineligible IGST credit. The registered person has already reversed the said credit vide DRC-03 along with interest before SCN. So the said payment was submitted in the reply to SCN. However, now the order has been passed wherein the payment is not allowed as Place of Supply selected in DRC-03 is 'Haryana' and not 'Kerala'.

1. Whether the officer has jurisdiction itself to issue SCN under 73r.w.s 20 of IGST Act, considering the IGST credit is already reversed? or to put it differently, whether wrong selection of POS be treated as non-payment of IGST?
2. Section 77/19 provides for CGST/SGST to IGST and vice versa. However, no mechanism prescribed to change PoS in DRC-03. So whether refund to be applied and payment to be made again? if so whether interest and penalty to be paid?

AI Summary

Debate on IGST Credit Reversal: Jurisdiction Issues under Section 73 and Place of Supply Errors A registered individual in Kerala reversed ineligible IGST credit using form DRC-03, selecting Haryana instead of Kerala as the Place of Supply (PoS). Despite reversing the credit and paying interest before the Show Cause Notice (SCN), the authorities did not accept the payment due to the incorrect PoS. The forum discusses whether the officer had jurisdiction to issue an SCN under Section 73 of the IGST Act and if a refund or additional payment with interest and penalties is necessary. Participants argue that the wrong PoS should not be treated as non-payment and suggest that the system should allow PoS correction without penalizing the taxpayer.