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TMI Blog2021 (4) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 34 of the CGST Act, 2017. Further it is found that the appellant has reported credit notes involved GST amount of ₹ 3,98,70,298/- in GSTR-1 of Sept.,2018 (which has been filed after 30.09.2018) but from GSTR-3B of Sept.,2018, it appears that they did not adjust liability as per Section 34(2) of the CGST Act, 2017. The similar issue has been dealt by the Central Board of Indirect Taxes and Customs, New Delhi vide Circular NO.137/07/2020-GST dated 13.04.2020, wherein it has been clarified that liability may be adjusted subject to time limit and conditions as per provisions of Section 34 (2) of the CGST, Act, 2017 - the appellant should adjust the tax liability in the GST return for the month of June, 2018, August, 2018 and September, 2018, but the appellant has failed to do so, therefore, he is not entitled to claim refund as it is not a case of excess payment of tax. Whether the Appellant entitle to claim refund of excess paid tax in terms of Section 54 of the CGST Act, 2017? - HELD THAT:- In this case 3 credit notes/ one debit note has been issued for value and GST amount against one supply of goods, therefore it is covered under the provisions of Section 34 of CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted ₹ 2,49,174/-(IGST) Total ₹ 2,49,174/-. 2. BRIEF FACTS OF THE CASE: 2.1 The appellant having GSTIN No.08AAACL1069K1ZF is engaged in manufacture and supply of pharmaceutical products falling under Chapter 30 of the CGST Tariff having their principal place of business at 51A, Jhotwara Industrial Area, Jaipur, has filed refund claims under Section 54(3) of CGST Act,2017 in respect of excess payment of tax for the period and amount mentioned at above in Para-1 of the above Table in column No.(4) (5). 2.2 The adjudicating authority has issued a show cause notices in Form GST-RFD-08 No.ZS0808200154653 dated 11.8.2020, ZT0808200154597 dated 11.8.2020 and No.ZZ0808200101631 dated 08.08.2020 respectively proposing rejection of refund claims and given the following remarks therein: i) Taxpayer issued Invoice No.1 to RITES of taxable value of ₹ 11,74,98,541/- and GST ₹ 1,40,99,825/-) and also issued debit note of Taxable value of ₹ 9,53,12,728/- and GST ₹ 1,14,37,527/-. In this regard they issued Credit Note No.1 and 2 of that much amount to negate the effect of Invoice and debit note. ii) The Taxpayer issued Invoices No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent consignees situated across India on behalf of MOHFW. Supplies to MOHFW were made as supplies to unregistered customer i.e. B2C supply. 3.3 The 23 B2C GST invoices were issued to RITES Ltd instead of MOHFW with taxable value of ₹ 11,74,98,541/- and GST of ₹ 1,40,99,825/ (hereinafter referred to as 'Invoice ONE'). Thus, there were two errors here, namely, the following : B2C GST invoices were issued in the name of RITES Ltd (instead of MOHFW); and GST was short paid to the extent of ₹ 1,06,898/-. The aforesaid 23 B2C GST invoices were disclosed in respective Form GSTR-1 filed for the tax period August, 2017 to October, 2017 and GST of ₹ 1,40,99,825/-was paid vide respective Form GSTR-3B filed for the tax period August, 2017 to October, 2017. (First-time payment of GST). 3.4 First, a set of B2C GST Credit Notes in the name of RITES Ltd having taxable value of ₹ 11,83,89,358/- and GST of ₹ 1,42,06,723/- were issued in June 2018 (hereinafter referred to as the 'Credit Note ONE'). As such, these Credit Notes ONE were inadvertently issued for a GST amount of ₹ 1,42,06,723/- instead of being issued for ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 2,49,174/-) and in September, 2018 (GST of ₹ 1,11,88,353/-). 3.9 Further, as mentioned in para above, a new set of 23 B2C GST invoices in the name of MOHFW with GST of ₹ 1,42,06,722/- were to be issued. However, while issuing the same, again due to an inadvertent error, the Place of Supply ('POS') was wrongly printed on the 23 B2C GST invoices issued in June 2018 (hereinafter referred to as 'Invoice TWO'). 3.10 In order to rectify the above mistake of wrong POS in GST Invoice TWO, a set of B2C GST Credit Notes with GST of ₹ 1,42,06,722/- were issued in September 2018 (hereinafter referred to as the 'Credit Notes THREE'). Even these adjustments were required to be made only in Form GSTR-1. 3.11 However, while Invoice TWO and Credit Note THREE were correctly disclosed in the GSTR-1 of September, 2018, thereby nullifying the GST effect in GSTR-1, Invoice TWO was also wrongly considered as additional liability in GSTR-3B of June, 2018. This culminated into excess GST payment of ₹ 1,42,06,722/- in the month of June, 2018. 3.12 As Invoice TWO was nullified by issuance of Credit Notes THREE, another set of 23 B2C Invoices wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject matter of two separate Appeals being filed simultaneously. 3.15 From the aforesaid reply to the Show Cause Notice, it is clear that the Appellants have not adjusted Credit Notes in their GST Returns and therefore refund claimed for excess payment of tax, is in order. The errors primarily are due to the following reason : 3.16 Excess payment of tax is on account of upload of Debit Note and Invoice THREE in GSTR-3B of September, 2018 on which GST of ₹ 2,53,95,075/- was paid additionally. 3.17 The Appellants first time paid GST of ₹ 1,40,99,825/- for the disputed supply covered by 23 B2C invoices and this factum was duly reflected in both GSTR-1 and GSTR-3B filed for the period from August to October, 2017. This is manifestly self-evident and apodictic. 3.18 Second time, the Appellants inadvertently paid GST of ₹ 1,42,06,722/- by considering Invoice TWO as additional liability in GSTR-3B of June, 2018. As explained in the forgoing paras, it is reiterated that in order to rectify the mistake of having issued invoices wrongly in the name of RITES LTD instead of MOHFW, the Appellant issued Invoice-TWO being 23 B2C GST invoices in the name of MOHFW w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, there were some inadvertent errors in 23 GST Invoices originally issued. These errors were supposed to be rectified by way of GST Credit Notes and fresh GST Invoices. However, these adjustments were required only in the Form GSTR-1, and not in the Form GSTR-3B of the subsequent tax period, as there was, admittedly, no error in the GST portion. (c) Furthermore, the Credit Note ONE and Credit Note TWO were duly issued and uploaded in Form GSTR -1 alone. The fresh set of GST Invoices, i.e. Debit Note and Invoice THREE were also uploaded correctly in Form GSTR-1. However, the Debit Note and the Invoice THREE were also wrongly uploaded in form GSTR-3B of September, 2018, leading to EXCESS PAYMENT OF GST OF ₹ 2,53,95,075/- IN FORM GSTR-3B OF SEPTEMBER, 2018. (d) Accordingly, the excess payment of GST in the present Refund Claim is on account of upload of Debit Note and Invoice THREE in GSTR-3B of September 2018 on which GST of ₹ 2,53,95,075/- was paid additionally and erroneously. 3.22 THAT the learned Adjudicating Authority has, in view of the foregoing explanation and ground, erred in concluding that the excess payment of tax has been compensated, inasmuch as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Various kinds of refunds may arise under different provisions of GST law, which inter alia, include Excess payment due to mistake or otherwise . 3.25 THAT the learned Adjudicating Authority has failed to appreciate that, as per Notification No.16/2020-Central Tax, dated 23-3-2020, sub-rule (4A) has been inserted in Rule 86 of the CGST Rules, 2017 which reads as under : (4A) Where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be recredited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03. The aforesaid amendment, with reference to payment through Electronic Credit Ledger , has also been explained in C.B.I. C. Circular No. 135/05/2020-GST, dated 31-3-2020. It is, therefore, submitted that the Government recognizes the fact that there can be issues related to excess payment of tax due to various reasons, and such excess payment of tax is to be refunded. The impugned Order is, therefore, in conflict with the specific directions/instructions of the Board. 3.26 THAT the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. State of Rajasthan reported in 1981 SC 1681 Shiv Shanker Dal Mills reported in AIR 1980 SC 1037 4. Personal Hearing in the case was held on 05.02.2021 through video conference, wherein, Shri Subramanyam Kaza, Authorized Representative of the appellant, appeared for personal hearing and explained the case in detail and reiterated the submission already made in the grounds of appeal. Further, he stated that, will send a summary of grounds of appeal through email. In view of above, he requested for early decision. 5. Shri Sunil Kumar authorized representative (duly authorized by the appellant) vide his letter dated 08.03.2021 has submitted GSTR-1 returns for August, 2017 to Oct. 2017, June, 2018, August, 2018 and Sept.2018, copy of sample invoices, debit notes and credit notes issued, excel statement regarding the details of set of invoice 01, Invoice 02 and invoice 03, debit note, credit not 01, credit note 2 and credit note 3. He has further submitted that they have reported one credit note having IGST liability of ₹ 1,53,594/- in the GSTR-1 return for the month of October, 2018 and the same has not been reported in the GSTR 3 B return of October, 2018. 6. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l law, to justify oppugning of the refund claims. (ii) Whether the Appellant entitle to claim refund of excess paid tax in terms of Section 54 of the CGST Act, 2017. 9. I find that the appellant issued invoice No.1 to M/s RITES of taxable value ₹ 11,74,98,541/- and GST ₹ 1,40,99,825/- and also issued Debit Note of taxable value ₹ 9,53,12,728/- and GST ₹ 1,14,37,527/- . In this regard they issued Credit Note No.1 and 2 of that much of amount to negate effect of invoice and debit Note. The appellant further issued invoices No.2 in the name of MOHFW of taxable value of ₹ 11,83,89,351/- and GST ₹ 1,42,06,722/-. The appellant mentioned wrong place of supply in the invoice, therefore, the appellant issued credit Note 3 against invoice No.2. Thereafter the appellant issued invoice No.3 to MOHFW of the same value and GST. 10. Further I find that in this case, the appellant has issued 3 Credit notes and one debit note, therefore this case is covered under the provisions of Section 34 of the CGST Act, 2017. Further I find that the appellant has reported credit notes involved GST amount of ₹ 3,98,70,298/- in GSTR-1 of Sept.,2018 (which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In case GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which invoice is issued before supply of service, the supplier is required to issue a credit note in terms of section 34 of the CGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the CGST Act. There is no need to file a separate refund claim. However, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under Excess payment of tax, if any through FORM GST RFD-01. From the above legal provisions and factual position, it is clear that liability may be adjusted subject to time limit and conditions as per provisions of Section 34 (2) of the CGST, Act, 2017. From the above legal provisions of Section 34 (2) ibid, the appellant was required to adjust the tax liability from amount of credit note in GST return of that month in which month credit note has been issued and not later than Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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