Refund Eligibility in Case of Subsequent Compliance with Rule 86B

[PRATIK BHIMANI]

One of the dealers did not comply with Rule 86B of the CGST Rules, which mandates payment of at least 1% of output tax liability in cash, at the time of filing GSTR-3B.

The entire liability was discharged through the Electronic Credit Ledger (ITC).

Subsequently, the dealer voluntarily paid the required 1% through the Electronic Cash Ledger to comply with Rule 86B.

The issue is whether the dealer can now claim a refund of the GST earlier paid through the Electronic Credit Ledger

[KASTURI SETHI]

Yes. You can apply for refund by way of re-credit. The dealer has paid tax twice. It is excess payment of tax. 

[PRATIK BHIMANI]

thanks sir for your reply.But as per department there is no section under the act which allows the refund of tax paid twice in above manner.so can you please give reference to the section which can be referred at the time of filing refund claim.or say under which category the refund application can be made.
Thanks in advance.

[Ashish Rawat]

Yes since tax has effectively been paid twice once through itc and again in cash due to rule 86b it becomes excess payment so the dealer can claim refund or seek recredit of the amount that was earlier paid through the electronic credit ledger

AI Summary

GST refund: dealer who paid tax via ITC and later paid mandatory 1% cash can apply for re-credit refund. Dealer paid entire output tax through the Electronic Credit Ledger, later paid the mandatory 1% from the Electronic Cash Ledger to comply with Rule 86B; the subsequent cash payment resulted in duplicate discharge and an excess payment, and the dealer may apply for a refund by way of re-credit to restore the duplicated amount.