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 73 r.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

Place of supply error does not amount to non-payment of IGST; administrative correction or refund should be facilitated.
An incorrect place-of-supply entry in a DRC form that follows an actual reversal and transfer of IGST to the Central Government does not amount to non-payment of IGST; the department should correct the place-of-supply administratively or refund the wrongly allocated tax so the taxpayer can make a correct payment, rather than treating the typographical error as a basis for adjudication or imposing interest and penalties.