GST
Refund adjusted against an old demand
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Facts
Sec 54(10) and Rule 92 allow the officer to adjust a refund against unpaid tax, interest or penalty under the Act, recorded in RFD-07. If the demand is stayed in appeal, recovery should not proceed.
Provisions and law
- Sec 54(10), CGST Act 2017Refund may be withheld or adjusted where returns are pending or dues are unpaid
- Rule 92, CGST Rules 2017Final refund order RFD-06, adjustment RFD-07 and notice RFD-08
- Sec 107(7), CGST Act 2017Recovery of the balance is stayed once the pre-deposit is paid
Analysis
If you have a confirmed unpaid demand, adjustment is lawful. If you have appealed with pre-deposit, the balance is stayed and adjustment can be challenged. Send the officer the appeal acknowledgement and payment proof.
Conclusion
- Check the liability register for the demand
- If under appeal, send the appeal proof
- Ask for the RFD-07 order in writing
- Appeal the adjustment if wrong
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Refund of excess cash ledger balance
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