Tax wrongfully collected and deposited under GST – Procedure – Section 70 of Revised Model GST

By | February 26, 2017
(Last Updated On: February 26, 2017)

Section 70 of Revised Model GST

GST  is a new law and practically there will be difficulties in ascertaining the nature of transaction whether it is inter-state or intra state, therefore in section 70 of Revised Model GST Law , Govt has inserted section 70 for the benefit of the Assessee.

Case-1

If Inter-state supply wrongfully  considered as Intra-state supply – Refund of CGST/ SGST :- The new sub-section provides refund of CGST/ SGST if a taxable person who has paid CGST/SGST (in SGST Act) on a transaction considered by him to be an intra-state supply, but which is subsequently held to be an inter-state supply

Case-2

Intra-state supply wrongfully considered as Inter State Supply :- The new sub-section provides waiver of interest in situations where IGST is wrongly paid by assessee while he was required to pay CGST/SGST. This provision is beneficial to assessee. It is also pertinent to note that vice versa has also been expressly mentioned in section 19 of the Revised IGST Law wherein it is stated that in cases where CGST/SGST is paid by mistake while IGST was required to be paid, then too, no interest will be demanded from assessee.

Relevant Extract of Section 70 of Revised Model GST Law released in November 2016

70. Tax wrongfully collected and deposited with the Central or a State Government 

(1) A taxable person who has paid CGST/SGST (in SGST Act) 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 granted refund of the amount of CGST /SGST (in SGST Act) so paid in such manner and subject to such conditions as may be prescribed.

(2) A taxable person who has paid IGST 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 CGST/SGST payable.

Relevant Extract of Draft IGST Law of June, 2016

Section 70:- Tax wrongfully collectedand deposited with Central or State Government:-

(1) A taxable person who has paid CGST/SGST (in SGST Act) 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 granted refund of the amount of CGST /SGST (in SGST Act) so paid in such manner and subject to such conditions as may be prescribed.

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