Prescribing manner of re-credit in electronic credit ledger using FORM GST PMT-03A.

Circular No.: 174/06/2022-GST
Date of Circular: 6th July 2022
Relevant Sections and Rules:

• CGST Act, 2017:
  • Section 54(3): Refund of unutilised input tax credit
  • Section 50: Interest
  • Section 168(1): Power to issue instructions
• CGST Rules, 2017:
  • Rule 86(4B): Re-credit on repayment of erroneous refund
  • Rule 96(10): Conditions for IGST refund on export
  • Rule 96(3): Refund of IGST paid on exports
  • FORM GST DRC-03 and FORM GST PMT-03A
• Notification:
  • No. 14/2022-CT dated 05.07.2022

Summary of Clarification Provided:

1. Introduction of FORM GST PMT-03A for Re-credit of ITC Post Refund Repayment:
   To address the difficulty faced by taxpayers in reclaiming ITC after repayment of an erroneous refund, the CBIC has introduced FORM GST PMT-03A through Rule 86(4B). This enables the proper officer to re-credit the electronic credit ledger where a taxpayer repays:

• Excess/unlawful refund of IGST on exports, or
• Erroneous refund of unutilised ITC under zero-rated/inverted structure.

This re-credit is available only after full repayment of the refund amount (with interest and penalty, if applicable) via FORM GST DRC-03.

2. Eligible Categories for Re-credit Through FORM GST PMT-03A:
   Re-credit can be granted for refunds wrongly claimed under the following categories:

• IGST refund on export of goods violating Rule 96(10)
• Unutilised ITC on export of goods/services without tax
• Unutilised ITC on zero-rated supply to SEZ without tax
• Unutilised ITC due to inverted tax structure

3. Procedure for Re-credit:

• The taxpayer must first repay the erroneous refund via FORM GST DRC-03 (in cash).
• While paying, the reason must be clearly mentioned in the text field.
• The taxpayer must then submit a written request in the prescribed Annexure-A format to the jurisdictional officer.
• Upon verification of complete payment, the officer shall pass an order in FORM GST PMT-03A to re-credit the amount to the electronic credit ledger, ideally within 30 days of request/payment, whichever is later.

4. Other Clarifications:

• The re-credit process is manual until automation is available on the GST portal.
• Trade notices are to be issued by field formations to inform taxpayers.
• Annexure-A captures all relevant refund, repayment, and declaration details.

Source: Circular No.: 174/06/2022-GST