TaxTMI 
TaxTMI 
TaxTMI 
Refund of tax paid on non-compliance of rule 86B
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....efund of tax paid on non-compliance of rule 86B<br> Query (Issue) Started By: - vaibhav agrawal Dated:- 31-10-2025 Last Reply Date:- 11-11-2025 Goods and Services Tax - GST<br>Got 9 Replies<br>GST<br>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. Ca....
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....n 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)? Reply By Pinnacle Tax Advisor: The Reply: This case pertains to the excess payment of tax made by mistake, for whic....
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....h a refund is permissible. As per the applicable provisions, the two-year time limitation for claiming the refund begins from the date of tax payment. Since the excess payment arose due to litigation concerning security, the two-year limitation should be counted from the date of payment made in connection with that scrutiny-not from the date of filing GSTR-3B. Reply By Shilpi Jain: The Reply: Y....
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....ou should also be able to take a re-credit, though could lead to dispute from the department. So if 2 years have not lapsed from date of payment you should proceed for refund. Also have a look at this decision AM Enterprises 2024 (9) TMI 1485 - HIMACHAL PRADESH HIGH COURT Reply By KASTURI SETHI: The Reply: Relevant date of computation of time limit for filing refund claim b....
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....y way of re-credit is the date of payment of tax in cash. Reply By KASTURI SETHI: The Reply: Also see replies against Issue ID 120149. Reply By PAWAN KUMAR: The Reply: As per my view, the date of payment of tax, relevant date in this case is :- Section 54, second explanation, Clause (2) :- (h) in any other case, the date of payment of tax. two years f....
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....rom the tax payment date. Reply By KASTURI SETHI: The Reply: In this case, there are two dates of payment of tax i.e. payment of tax via Electronic Credit Ledger and payment of tax in cash. The most crucial point is "What is a determinant factor here ?" Which payment is instrumental in excess payment of tax ? Reply By vaibhav agrawal: The Reply: Dear Kasturi Sethi ....
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....sir Refund will be attracted only when liability is paid in cash (excess 1 percent) but we will be seeking refund for that 1 percent which was utilized through ITC at the time of filing of GSTR 3B. So what according to you shall be determinant factor here ? Reply By KASTURI SETHI: The Reply: In continuation of my earlier replies:- &nb....
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....sp; (i) You have paid tax in excess. Tax cannot be charged twice. It is well settled law. If tax charged twice, that is without any authority of law. Hence time limit would not be applicable. Study deep. (ii) You have used ITC which was not admissible to you as per GST Laws. It is an offence and hence interest is payable (despite having sufficient balance ....
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....in Electronic Credit Ledger) and penalty is imposable in this situation. First pay Govt. dues on the issue involved and thereafter, you should talk of claiming refund of ITC by way of re-credit. (iii) The issue is worth contesting. In my view, chances for decision in your favour are bright. Reply By Padmanathan KV: The Reply: In my opinion you are entitled to re-credit. I am of the ....
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....view that 2 years should not apply for such re-credit. However, you will have to litigate the matter if department does not agree.<br> Discussion Forum - Knowledge Sharing ....