CBIC: Implementation of GST PMT-03 for Re-Crediting the ITC Approved as Refund

The Central Board of Indirect Taxes and Customs (CBIC) has circulated the ‘advisory’ regarding the implementation/execution of PMT-03 for re-crediting the Input Tax Credit (ITC) that has been approved as a refund.

The Board has Highlighted the following Notification:

“Notice bearing number16/2020-Central Tax dated March 23, 2020, through which sub-rule4 A has been added in Rule 86 of the CGST Rules, 2017 and Para 4 of the circular bearing number 135/05/2020 dated March 31, 2020, in which the procedure for refund of tax paid on supplies other than zero-rated supplies was furnished/provided.”

As per sub-rule, 4A of Rule 86 of the CGST Rules, 2017 that is read with Para 4 of the Circular dated March 31, 2020, a taxpayer is empowered to refund of tax that is wrongly paid or paid in excess (not zero-rated supplies), in the similar mode by which the liability of tax liability had been discharged, i.e.. If in case tax had been paid by

• Partly debiting the cash ledger and

• Partly debiting the credit ledger

Then the refund shall be approved/sanctioned and credited in the bank account of the taxpayer by issuing of RFD-05 and also the credit part ought to be re-credited to the electronic credit ledger of the taxpayer through PMT-03.

“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 operationalization of re-crediting of ITC (Input Tax Credit) 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, the CBIC said.”

However, the new functionality is applicable and suitable only to the 4 types of refund as mentioned in the aforesaid referred circular namely

1. refund of excess tax that has been paid;

2. refund of tax that is paid on an intra-State supply that has been later held to be inter-State supply and vice versa;

3. refund on account of provisional assessment/ assessment/any other order/appeal and

4. refund on account of “any other” ground or reason