TaxTMI 
TaxTMI 
Tax Liability Paid through Credit Instead of Cash as per Rule 86B
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....ax Liability Paid through Credit Instead of Cash as per Rule 86B<br> Query (Issue) Started By: - ROHIT GOEL Dated:- 16-6-2025 Last Reply Date:- 17-10-2025 Goods and Services Tax - GST<br>Got 12 Replies<br>GST<br>In a case where the tax liability was mandatorily required to be discharged in cash in accordance with Rule 86B, but was inadvertently paid through utilization of Input Tax Credit (ITC), a....
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....nd this irregularity has subsequently been identified during a departmental audit, whether the taxpayer is eligible to claim a refund of the tax amount earlier paid through credit, after the same liability has been correctly discharged in cash in compliance with Rule 86B? Reply By Sadanand Bulbule: The Reply: ITC once utilised cannot be refunded as it is not paid in cash. Refunds of ITC are allo....
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....wed only in specified circumastances like Zero rated supplies and Inverted Duty Structure defiined under the Act. Reply By Sadanand Bulbule: The Reply: There is a possiblity of excess payment of tax and re-credit of such amonut to ITC ledger, if the Proper Officer sanctions the refund in RFD-06. Try it. Reply By Sadanand Bulbule: The Reply: Plz refer CBIC Circular 174/06/2022-GST: Rele....
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....ased on July 6, 2022. Reply By KASTURI SETHI: The Reply: Refund on the ground of excess payment of tax by way of re-credit is allowed provided that it is not time barred. I agree with the reply of Sh.Sadanand Bulbule, Sir at serial no.1.1. Reply By Shilpi Jain: The Reply: When tax liability is discharged through cash ledger, the earlier utilised ITC would be excess tax paymen....
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....t which can either be adjusted against future liabilities or claimed as refund. No tax can be retained by Govt. withouth authority of law. Reply By ROHIT GOEL: The Reply: Dear mam, What would be considered as relevant date in case of such refund? Tax was paid via ITC in FY 2021-22 and FY 2022-23 and tax was paid in cash in June 2025. Now, deptt has issued SCN proposing to reject refund as time ....
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....barred by taking relevant date as date of payment by ITC. Are there decisions which say that deptt cannot retain doubly paid tax in GST/Excise/ST regime even though refund limitation has expired. Any suggestions would be welcome. Reply By ROHIT GOEL: The Reply: Dear sir, What would be considered as relevant date in case of such refund? Tax was paid via ITC in FY 2021-22 and FY 2022-23 and tax ....
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....was paid in cash again in June 2025. Now, deptt has issued SCN proposing to reject refund as time barred by taking relevant date as date of payment by ITC. Are there decisions which say that deptt cannot retain doubly paid tax in GST/Excise/ST regime even though refund limitation has expired. Any suggestions would be welcome. Reply By KASTURI SETHI: The Reply: In this situation, cause of action....
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.... is the date of payment of GST in cash. Hence relevant date would be June, 2025. The expression, cause' of action has not been defined in CGST Act. So you can take shelter of various judgments of Supreme Court on the issue, "What is cause of action ?" Here payment of GST in cash is the cause and the effect is excess payment or double payment. Reply By Sadanand Bulbule: The Reply: Dear Sirji Re....
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....ally empirical reply. Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, Thanks a lot for your validation of my reply. Reply By KASTURI SETHI: The Reply: For more clarification on the issue of "Cause of Action" go through an article titled, as "ARTICLE 141 OF THE CONSTITUTION OF INDIA - CAUSE OF ACTION" authored by Sh. Manoj Kuma Jha, Superintendent CGST [Published in 2019 (366) ....
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....E.L.T. A142. This article is based on the judgements of Hon'ble Supreme Court and legal dictionary. Reply By KASTURI SETHI: The Reply: In continuation of my above replies, also study the "Cause and Effect Theory" coined by David Hume. The author has explained the relationship between "cause and effect" with examples.<br> Discussion Forum - Knowledge Sharing ....