CBIC Prescribes Manner Of Re-Credit In Electronic Credit Ledger Using FORM GST PMT-03A

The taxpayers were facing difficulties in taking re-credit of the amount in the electronic credit ledger in cases where any excess or erroneous refund sanctioned to them had been paid back by them either on their own or on being pointed out by the tax officer.

In order to resolve the issue, GSTN has recently developed a new functionality of FORM GST PMT-03A which allows proper officers to re-credit the amount in the electronic credit ledger of the taxpayer.

The sub-rule (4B) in rule 86 of the Central Goods and Services Tax Rules, 2017 has been inserted vide Notification No. 14/2022-CT dated 05.07.2022 to provide for re-credit in the electronic credit ledger where the taxpayer deposits the erroneous refund sanctioned to him.

In order to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in the exercise of its powers conferred by section 168(1) of the Central Goods and Services Tax Act, 2017, issued a clarification.

As per Rule 86 (4B), there are four categories. Firstly, a refund of IGST obtained in contravention of sub-rule (10) of rule 96. Secondly, refund of unutilised ITC on account of export of goods or services without payment of tax. Thirdly, refund of unutilised ITC on account of zero-rated supply of goods/services to SEZ developer/Unit without payment of tax. Fourtly, refund of unutilised ITC due to inverted tax structure. In respect of the categories of refund sanctioned erroneously, re-credit of the amount in the electronic credit ledger can be done through FORM GST PMT-03A, on deposit of the erroneous refund along with interest and penalty.

The CBIC has clarified the procedure for re-crediting an amount in an electronic credit ledger.

The taxpayer shall deposit the amount of the erroneous refund along with applicable interest and penalty, wherever applicable, through FORM GST DRC-03 by debit of the amount from the electronic cash ledger. While making the payment through FORM GST DRC-03, the taxpayer shall clearly mention the reason for making the payment in the text box.

At the time an automated functionality for handling cases is developed on the portal, the taxpayer shall make a written request to the jurisdictional proper officer to re-credit the amount equivalent to the amount of refund paid back through FORM GST DRC-03 to the electronic credit ledger.

The proper officer must be satisfied that the full amount of erroneous refund, along with applicable interest, as per the provisions of section 50 of the CGST Act, and penalty, has been paid by the registered person on FORM GST DRC-03 by way of debit in the electronic cash ledger. The proper officer shall re-credit an amount in the electronic credit ledger, equivalent to the amount of erroneous refund so deposited by the registered person, by passing an order on FORM GST PMT-03A. The re-credit shall be done within a period of 30 days from the date of receipt of the request for re-credit of the erroneous refund amount or from the date of payment of the full amount of the erroneous refund along with applicable interest and penalty.

Circular No. 174/06/2022-GST

Dated: 06.07.2022

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