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CA Intermediate · Taxation · Payment of Tax

Anita Enterprises, a regular taxpayer, filed a refund claim after depositing Rs 10,000 as tax by mistake in the wrong head (CGST instead of IGST) on an inter-State supply. Which provision applies in respect of the tax paid under the wrong head?

The taxpayer must pay Rs 10,000 under the correct head, IGST, and may then claim a refund of the amount wrongly paid under CGST. The law treats the two as different taxes for this purpose and provides refund of the wrongly paid tax, not forfeiture.

  1. AThe tax paid is forfeited to the Government
  2. BTax must be paid again under the correct head, and a refund of the wrongly paid tax may be claimedCorrect
  3. CTax paid is automatically adjusted by the portal against IGST
  4. DNo refund is possible because CGST and IGST are the same tax

Explanation

Where a person has paid CGST and SGST on a supply held to be inter-State (or IGST on one held intra-State), the person is required to pay the correct tax and may claim a refund of the tax wrongly paid. There is no automatic adjustment or forfeiture. Hence option 2.

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