Refund of IGST Paid suo moto adjusted against CGST & SGST

[Kedar Joshi]

While filing GSTR-3B for the month of January-2021, IGST is paid Rs. 11,21,200 instead of Rs. 1,21,200/-, I,e. excess paid by Rs. 10,00,000/-. Further, while filing of GSTR-3B for the month of February-2021, the said excess payment of IGST is adjusted by reporting short value of CGST and SGST liability by Rs. 5,00,000/- each.

During the GST Assessment in February-2025, the officer has pointed out the mistake and raised demand of Rs. 5,00,000/- each in CGST and SGST, the taxpayer has also paid the same through DRC-03.

Now, the taxpayer has filed an application for refund of IGST under head excess payment of IGST of Rs. 10,00,000/-. However, the officer has now rejecting the said claim of the taxpayer considering the date of payment as February-2021 i.e. date of filing of GSTR-3B, for the month of January-2021 and not February-2025, ie. Date of payment of tax under correct head in DRC-03.

Can Circular no. 162/18/2021-GST and section 77 of the CGST Act, be applied in above case?

Kindly advise.

AI Summary

Refund of IGST: limitation starts from payment under the correct head, not the initial erroneous payment.
Where IGST was inadvertently paid and later corrected by payment of CGST/SGST via DRC-03, the relevant date for filing an IGST refund is the date of payment under the correct head (the DRC-03 corrective payment), not the earlier date when IGST was paid in error; administrative circulars and the refund rules recognize the corrective payment as the trigger for the two year limitation period, and a rejection based on the earlier date may be challenged by representation and appeal.