One of construction contractor sold the flats after Building Completion certificate but he wrongly paid Tax under RCM by showing RCM on outward supply liable to RCM. Now he wants to reverse that RCM paid and utilize that amount as Tax payment for other liability. How to reverse that RCM paid? Can we show that RCM in ITC column Inward Supply liable to reverse charge or any other way to reverse it? and any time limit is there?

Reply- Tax wrongly paid and shown in monthly return in Form GSTR-3B can be corrected. CBIC vide Circular No. 26/26/2017-GST dated 29.12.2017 has prescribed the methodology for rectification of error in submission of GSTR -3B return. Accordingly, liability which was wrongly paid tax can be corrected in the return of subsequent month(s). This method will be useful in the excess payment of an earlier month being shown as payment relevant for the current month.

Alternatively such excess paid tax could be claimed as refund by following the process laid out in Circular No.125/44/2019-GST dated 18.11.2019 with the submission of relevant declarations and certification that if the refund is granted it would not result in unjust enrichment.