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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

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
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