Kind reference is invited to the notification No.16/2020-Central Tax dated 23.03.2020, vide which sub-Rule (4A) has been inserted in Rule 86 of the CGST Rules, 2017 and Para 4 of the Circular No 135/05/2020 dated 31.03.2020, wherein the procedure for refund of tax paid on supplies, other than zero rated supplies was provided.
2. As per sub-Rule 4A of Rule 86 of the CGST Rules, 2017 read with Para 4 of the Circular supra, a tax payer is entitled to refund of tax wrongly paid or paid in excess (other than zero rated supplies), in the same mode by which the tax liability was discharged, i.e., if the tax was paid by partly debiting the credit ledger and partly debiting the cash ledger, the refund shall be sanctioned in the same proportion. The cash part has to be sanctioned and credited to the bank account of the tax payer by issuance of RFD-05 and the credit part should be re-credited to the electronic credit ledger of the tax payer through PMT-03.
3. The PMT-03 functionality available at present in the online refund module is only for re-crediting of the rejected amount that has been debited at the time of filing of refunds. In order to enable the operationalisation of re-crediting of ITC sanctioned as refund towards tax wrongly paid or paid in excess by debiting the credit ledger, a new enhanced PMT-03 functionality has been developed and deployed in the system. This new functionality is applicable only to the following 4 types of refund as provided in the referred circular. File No.GenC/MISC/36/2021-RFD O/o-ADG-DGS-ZU-CHENNAI
i. Refund of excess payment of tax;
ii. Refund of tax paid on intra-State supply which is subsequently held to be inter- State supply and vice versa;
iii. Refund on account of assessment/provisional assessment/appeal/any other order; and
iv. Refund on account of “any other” ground or reason.
Thus, now CBIC can recredit any refund paid in excess, or wrong credit or refund on account of assessment etc. directly to your credit ledger.
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