A taxpayer paid entire output tax liability through ITC. During scrutiny, it was found that Rule 86B applied, requiring part payment in cash. The taxpayer has now paid the required amount in cash.
Can the ITC earlier utilized (now effectively replaced by cash) be refunded or re-credited to the Electronic Credit Ledger?
If refundable, will the two-year limitation under Section 54 be counted from the date of cash payment or from the date of original GSTR-3B filing (FY 2022-23)?
Taxpayer paid Rule 86B cash shortfall after using ITC; seeks re-credit or refund under Section 54 timing rules A taxpayer who used ITC to pay output tax but was later required under Rule 86B to pay part in cash has paid the cash shortfall and seeks re-credit or refund of the earlier ITC use. Forum contributors generally state excess tax paid can be refunded and the two-year limitation under Section 54 is computed from the date of payment of tax (i.e., the cash payment), not from the original GSTR-3B filing; several responders caution the department may dispute re-credit, note possible interest/penalty for improper ITC use, and advise litigation if the claim is denied. (AI Summary)
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