GST Circular No. 174/06/2022-GST: Re-credit of Erroneous Refunds via FORM GST PMT-03A

2025-03-03 05:58:42 02March

02March

GST Circular No. 174/06/2022-GST: Re-credit of Erroneous Refunds via FORM GST PMT-03A

<h3>GST Circular No. 174/06/2022-GST: Re-credit of Erroneous Refunds via FORM GST PMT-03A</h3>The Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 174/06/2022-GST on 6th July 2022, addressing the challenges faced by taxpayers in reclaiming erroneous refunds deposited back into the government’s account.To resolve this, the new functionality FORM GST PMT-03A has been introduced, allowing the re-credit of refunded amounts into the electronic credit ledger once deposited back along with applicable interest and penalties.<hr><h2>Key Highlights & Clarifications</h2><h3>1. Why Was This Circular Issued?</h3>✔ Taxpayers who erroneously received excess refunds and later returned them (voluntarily or upon notice) faced challenges in reclaiming the amounts into their electronic credit ledger. ✔ The introduction of FORM GST PMT-03A allows the tax department to restore the refunded amount back into the electronic credit ledger after verification. ✔ Rule 86(4B) of CGST Rules has been inserted through Notification No. 14/2022-CT, dated 05.07.2022, to enable this process.<hr><h3>2. Refund Categories Eligible for Re-credit</h3>Taxpayers can use FORM GST PMT-03A to re-credit amounts related to:<ol><li>Refund of IGST obtained in contravention of Rule 96(10).</li><li>Refund of unutilized ITC on exports without tax payment.</li><li>Refund of unutilized ITC on zero-rated supplies to SEZ developers/units without tax payment.</li><li>Refund of unutilized ITC due to the inverted tax structure.</li></ol><hr><h3>3. How to Apply for Re-credit?</h3>✅ Step 1: Taxpayer deposits the erroneous refund amount (with applicable interest/penalty) via FORM GST DRC-03. ✅ Step 2: Clearly mention the reason for payment in GST DRC-03, indicating that it is for an erroneous refund return. ✅ Step 3: Submit a written request (Annexure-A format) to the Jurisdictional Proper Officer for re-credit. ✅ Step 4: The tax officer verifies payment and issues an order in FORM GST PMT-03A to restore the amount in the electronic credit ledger. ✅ Step 5: Re-credit should ideally be completed within 30 days of request submission or full payment, whichever is later.<hr><h2>Impact on Businesses</h2><h3>✅ Benefits of This Circular</h3>✔ Businesses can now easily reclaim refunded amounts that were wrongly deposited. ✔ Ensures faster resolution of refund errors, reducing compliance burdens. ✔ Provides a structured approach for re-crediting amounts into the electronic credit ledger.<h3>❌ Key Compliance Considerations</h3>❌ Re-credit only applies to specific refund categories (not all refunds). ❌ Amounts must be fully paid back via FORM GST DRC-03 before applying. ❌ Delays in proper documentation may impact the 30-day processing timeline.<hr><a href="https://cms.plasament.com/storage/cir-174-06-2022-cgst.pdf">cir-174-06-2022-cgst</a>