IGST ITC extra claimed paid in other place of Supply state in DRC-03 - do we need to repay and claim refund or since it seems paid in correct head IGST but incorrect state in DRC-03, it should be ok, since IGST is a common allocation pool mainly driven by GSTR-1 in Govt GST accounting system.
For instance, if we are registered in Delhi and claimed extra ITC of 1 lakh with no proper reasoning because some parties did not file their bills.
Now what should be the basis to identify place of supply to repay IGST ITC extra claimed in DRC-03.
As of now, if the person paid back extra IGST ITC in DRC-03 but not in Delhi state as place of supply, while he marked Haryana as place of supply, since his interpretation at that time was that, due to extra ITC claimed in 3B, on FIFO basis, he offset Output liability IGST of Haryana state, so interpreting section 50 as to repay the tax short paid erroneously, he repaid IGST in Haryana place of supply.
So, what should be the correct place of supply in DRC-03 to repay extra IGST availed ?
In light of above, there are two ways to interpret while repaying extra ITC in DRC-03
1. To simply see extra ITC claimed in respective head and repay it back in DRC-03 in same state of registration, if there is no credit note or actual transaction reversal, rather it's just erroneous extra ITC claim.
Similarly, if it's extra CGST SGST availed, it may be reversed and repaid in same state in DRC-03.
2. Or, to co-orelate which output tax was short paid due to extra or fictitious liability offset in month of claiming extra ITC, although there is no one-to-one correlation laid out but going by this interpretation of section 50, it may also be a contention based on FIFO basis or so.. although its doesn't seems rational approach, but there is indeed a confusion here the way law has been drafted and given that there is no clarity on this and dept officers themselves appear to be of no help or guidance.
3. Is there no rectification module for this Inter-head / place of supply correction and related allocation of tax already paid just like GST PMT-09, rather than painful and stringent hardship route of again paying and claiming refund..
How does Government side of Inter-state GST accounting settlement happens .. In case there is any clarification please share..
CAclubindia
