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You can now claim a refund of wrongfully paid tax for up to 2 years
GST DOST's BLOG
Namaskar DOST!
I hope this email finds you well and you are enjoying the start of the change of season and weather.
One of the best circulars and amendments through notification from the GST Department among the recent ones for me is the one talking about giving 2 years for filing for a refund in cases of payment of tax under wrong heads.
Relevant Circular
Relevant Notification
What is the Circular about?
It is a pretty common scenario for businesses to pay the GST amount under the wrong head, among CGST/SGST and IGST. The process before this circular was cumbersome for businesses, and the officer had to approve the wrong payment for businesses to get a refund.
This circular has made the process easier as businesses can apply for a refund on their own. Also, the period of applying for the refund has been set at 2 years after making the payment in the correct head.
So, if you have made the tax payment under the wrong head, i.e., in CGST, /SGST or IGST, you can apply for a refund after making the payment in the correct head.
Explained the deadline with the following examples:
A taxpayer “A” has issued the invoice dated 10.03.2018 charging CGST and SGST on a transaction and accordingly paid the applicable tax (CGST and SGST) in the return for March 2018 tax period. The following scenarios are explained hereunder:
|
SN |
Scenario |
Last date for filing the refund claim |
|
1 |
Having realized on his own that the said transaction is an inter-State supply, “A” paid IGST in respect of the said transaction on 10.05.2021. |
Since “A” has paid the tax in the correct head before issuance of notification No. 35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 ( 2 years from the date of notification) |
|
2 |
Having realized on his own that the said transaction is an inter-State supply, “A” paid IGST in respect of the said transaction on 10.11.2021 i.e. after issuance of notification No. 35/2021-Central Tax dated 24.09.2021 |
Since “A” has paid the correct tax on 10.11.2021, in terms of rule 89 (1A) of the CGST Rules, the last date for filing refund application in FORM GST RFD-01 would be 09.11.2023 (2 years from the date of payment of tax under the correct head, i.e. integrated tax) |
|
3 |
Proper officer or adjudication authority or appellate authority of “A” has held the transaction as an inter-State supply and accordingly, “A” has paid the IGST in respect of the said transaction on 10.05.2019 |
Since “A” has paid the tax in the correct head before issuance of notification No. 35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 (2 years from the date of notification) |
|
4 |
Proper officer or adjudication authority or appellate authority of “A” has held the transaction as an inter-State supply and accordingly, “A” has paid the IGST in respect of the said transaction on 10.11.2022 i.e. after issuance of notification No. 35/2021-Central Tax dated 24.09.2021 |
Since “A” has paid the correct tax on 10.11.2022, in terms of rule 89 (1A) of the CGST Rules, the last date for filing refund application in FORM GST RFD-01 would be 09.11.2024 (2 years from the date of payment of tax under the correct head, i.e. integrated tax) |
The examples above are only indicative ones and not an exhaustive list.
We have attached the circular and notification with the email, so you can read it in detail.
If you have any doubts or are confused about something particular in GST, feel free to contact us.
Thanks & Regards
Team GST DOST
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