Our Company has a Transitional Credit on Cenvat of Rs.14,00,000 as on 1st July 2017. While filing the GSTR 3B of July 2017, as it was the very first return, we were in the notion that that Tran credit will automatically get reflected as Input Tax Credit in GSTR 3B. As it was not getting reflected as Input credit, we thought of claiming that as Input credit in GSTR3B. However while entering the ITC in the return, we have wrongly entered it in IGST Column instead of CGST. It was only after submission of return did we realize that Tran Credit is actually coming in Electronic Credit ledger. As we have the Zero Rated Supplies with payment of GST, the website has adjusted IGST Credit against the output IGST Payable of Rs.3,00,000. It means we have taken the Tran Credit twice (Once in the return by directly entering the amount as IGST Input in GSTR 3B of July 2017 and once again as CGST Tran Credit that came directly to Electronic Credit Ledger). As we have excess IGST Credit balance in July 2017, we have no option but to use the same for payment of Outward IGST even in the months of August, September and October.As the schema does not allow us to set off CGST Credit against Zero Rated Supplies with payment of Tax.Later in the month of November 2017, we got LUT. We have also made a point not to use the Tran Credit sitting in the electronic Credit Ledger under the head CGST. Still that amount of Rs.14,00,000 is reflecting in our Electronic Credit Ledger.
Now we need to know how to apply for the refund of that Rs.14,00,000.Even If we reverse the Credit of Rs.14 lacs in GSTR 9, the department may come and ask us for payment of that amount and we are not sure if they can actually understand the situation.
Please let us know if there is any other alternative so that we can get our refund.
12 July 2019
It is suggested to go for with payment of tax for 2-3 months to exhaust TRAN credit available and apply for refund for "zero rated with payment" the process is smooth and quicker. In present case the Credit is only availed twice but not utilized, so dept dispute can be won over.
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