Sec 77 – Tax wrongfully collected and paid to Central Government or State Government

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Sec 77 – Tax wrongfully collected and paid to Central Government or State Government 2017-04-14T11:23:39+00:00

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  • Ashish BadalaCA Ashish Badala
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    #1395 |

    (1) A registered person who has paid the Central tax and State tax or, as the case may be, the Central tax and the Union territory tax on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed.
    (2) A registered person who has paid integrated tax on a transaction considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall not be required to pay any interest on the amount of central tax and State tax or, as the case may be, the Central tax and the Union territory tax payable.

    Priya MadrechaPriya Madrecha
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    77.1    Introduction
    This provision deals with a situation when CGST/SGST or CGST/UTGST is paid on any interstate supply. Further also it covers interest implication a situation where IGST is paid on transaction of intra-state supply.
    77.2    Analysis
    (i)    This provision deals with a situation when, if a taxable person wrongly pays CGST/SGST or CGST/UTGST on the transaction treating it as intra-state supply, but which is subsequently held to be inter-state supply. Upon payment of IGST on such transaction, the CGST/SGST or CGST/UTGST will to be refunded in such manner and subject to prescribed conditions.
    (ii)    The refund of such CGST/SGST or CGST/UTGST would be granted subject to such conditions as may be prescribed in this regard.
    (iii)    If a taxable person wrongly pays IGST by treating a supply as inter-state supply, which is subsequently held to be intra-state supply, interest is not required to be paid on the CGST/SGST or CGST/UTGST payable.

    77.3    Related provisions
    Section      Description     Remarks
    Section 54     Refund of tax     Provision for claiming refund of tax.
    Section 70     Tax wrongfully collected and deposited with the Central or a
    State Government     This section deals with refund of CGST/SGST paid mistakenly on inter-state supply considering it to be an intra-state supply.
    77.4    FAQs
    Q1. What is the remedy available when tax is paid wrongly as CGST/SGST when subsequently the supply is considered as inter-state supply attracting IGST?
    Ans. Refund can be claimed by the taxable person who has paid CGST/SGST or CGST/UTGST on payment of IGST subject to such conditions as may be prescribed.
    Q2. Is interest payable on CGST/SGST or CGST/UTGST, when IGST was wrongly paid on the transaction of intra-state supply?
    Ans. When IGST was wrongly paid on intra-state supply, it is not required to pay any interest on the amount so paid when CGST/SGST or CGST/UTGST becomes payable.
    77.5    MCQ
    Q1. Which section deals with tax wrongly collected and deposited with Central or State Government?
    (a)    Section 57
    (b)    Section 58
    (c)    Section 77
    (d)    Section 79
    Ans. (c) Section 77
    Q2. If CGST/SGST is wrongly remitted instead of IGST, the tax payer can___________
    (a)    seek refund
    (b)    adjust against future liability
    (c)    take re-credit
    (d)    file a civil suit for recovery
    Ans.  (a) seek refund

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