REFUND OF GST AGAINST INVERTED DUTY STRUCTURE, Goods and Services Tax - GST

[SAFETAB LIFESCIENCE]

Dear Experts,

We have obtained refund of accumulated GST against inverted duty structure in March-2018 for the period of earlier months. The refund included ITC credited against goods (inputs) and services. Now we have been instructed to repay the refund received against input services against Notification No. 26/2018 dt. 13.06.2018 retrospective effect from 01.07.2017.

Now, my query is shall reverse the demanded amount from Electronic Credit Ledger today as I have sufficient balance now or I have to pay only in Cash Ledger. I think this reversal of GST is eligible for re-credit of ITC as the Department has not denied the credit and denied only the refund. If I pay cash in Cash Ledger, shall I use the amount for offset of GST payment immediately in the same month itself.

Posts / Replies

[KASTURI SETHI]

Sh.Nandan Khambete Ji, Sir, I agree with you to the extent that the amount of sanctioned refund cannot be recovered from the party after six months as explained by you inasmuch as the party is not at fault at all. Thus the remaining issues are relegated to the background. I also agree with your logic that the party must not rrepay the amount without letter or SCN irrespective of the fact whether the amount is small or huge. To repay the amount of sanctioned refund in view of retrospective amendment and that too after the expiry of six months is unconstitutional. When the department is on weak wicket regarding merits/legal aspect, the department tries to recover through persuasive strategy. It appears to me the party is ready to repay the amount on the basis of verbal request or written letter and not SCN. On the other hand, for the sake of having cordial relationship with the department, the approach of the party is positive and appreciable. During my service I have seen so many assessees who deposit the Govt. dues on the basis of letter or verbal request.