The Central Board of Indirect Taxes and Customs on 20th April 2021 has issued an advisory on implementation of PMT-03 to re-credit the Input Tax Credit (ITC) sanctioned as a refund. The PMT-03 functionality available at present in the online refund module is only for re-crediting of the rejected amount that has been debited at the time of filing of refunds.
In order to enable the operationalisation of re-crediting of ITC sanctioned as refund towards tax wrongly paid or paid in excess by debiting the credit ledger, a new enhanced PMT-03 functionality has been developed and deployed in the system.
This new functionality is applicable only to the following 4 types of refund:
- Refund of excess payment of tax;
- Refund of tax paid on intra-State supply which is subsequently held to be interstate supply and vice versa;
- Refund on account of assessment/provisional assessment/appeal/any other order; and
- Refund on account of “any other” ground or reason.
As per sub-Rule 4A of Rule 86 of the CGST Rules, 2017 read with Para 4 of the Circular supra, a taxpayer is entitled to refund of tax wrongly paid or paid in excess (other than zero-rated supplies), in the same mode by which the tax liability was discharged. The cash part has to be sanctioned and credited to the bank account of the taxpayer by issuance of RFD-05 and the credit part should be re-credited to the electronic credit ledger of the taxpayer through PMT-03.
