Section 54 r w r 96A belated realisation - Reg.

[Raam Srinivasan Swaminathan Kalpathi]

We had exported engineering services under LUT and invoiced the client for $25000/- in March 2024. After remitting $15000/- the client expressed inability to settle the balance amount of $10000/-. The same was written off in the books as bad debts and we dutifully remitted GST @18% with appropriate interest u/s. 50 as provided in Rule 96A through DRC-03 challan for the unsettled amount of $10000/- in October 2024. The said client had today wired the balance amount of $10000/- and we have secured the FIRC.

The query is, can I claim refund of the amount remitted through DRC-03 or would it be appropriate to avail credit of the same in GSTR-3B in this month's return? Kindly clarify. Thanks

AI Summary

GST adjustment for belated realisation: refund or return adjustment available when previously remitted tax is later realised.
Tax remitted under the belated realisation procedure via the recovery payment form after a bad debt write off became refundable or adjustable when the debtor later paid; Circular 26/2017 permits netting of past differentials in returns but GSTR 3B cannot show negative figures, so taxpayers may either adjust in subsequent returns or claim a refund, though refund via the recovery payment is often the safer and more practical option, with an alternative to reappropriate books and adjust against other liabilities with departmental intimation.