Refund issue

[Sudipta Dey]

Sir,

some taxpayer violates the provision of section 49 of CGST Act'17 read with rule 86B of CGST rules by way of paying full tax liability by ITC and then Audit team catches the issue and ask the taxpayer to pay the liability of GST by cash along with interest and penalty. Will the taxpayer be eligible for refund of the ITC that has been previously used to discharge his tax liability because double payment of tax happening here? What is the process of applying for such refund?

AI Summary

Input tax credit recovery: pay outstanding tax in cash and pursue refund via excess payment procedure under refund law.
Where ITC was used to discharge tax but enforcement requires cash payment, the taxpayer must pay tax in cash and claim refund of the ITC as an Excess Payment. File Form RFD-01 on the portal and submit a physical copy; refund claims are subject to adjudication. Judicial commentary has questioned the vires of the operative rule but does not automatically suspend it; taxpayers may litigate or make departmental disclosures. Recrediting reversed ITC has no statutory time limit but cannot be self-initiated without adjudication and applicable procedural compliance.