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Implementation of PMT-03 to re-credit the ITC Sanctioned as Refund

Implementation of PMT-03 to re-credit the ITC Sanctioned as Refund

The CBIC has issued Advisory No. 8 /2021- Refunds dated 20th April 2021 related to the implementation of PMT-03 to re-credit the ITC sanctioned as a refund.
Kind reference is invited to the notification No.16/2020-Central Tax dated 23.03.2020, vide which sub-Rule (4A) has been inserted in Rule 86 of the CGST Rules, 2017 (Rule 86 of CGST Rules, 2017 talks about electronic credit ledger) and Para 4 of the Circular No 135/05/2020 dated 31.03.2020, wherein the procedure for refund of tax paid on supplies, other than zero-rated supplies were provided.

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, i.e., if the tax was paid by partly debiting the credit ledger and partly debiting the cash ledger, the refund shall be sanctioned in the same proportion. The cash part has to be sanctioned and credited to the bank account of the taxpayer by the issuance of RFD-05 and the credit part should be re-credited to the electronic credit ledger of the taxpayer through PMT-03.

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 operationalization 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 as provided in the referred circular.

i. Refund of excess payment of tax;
ii. Refund of tax paid on an intra-State supply which is subsequently held to be inter-State supply and vice versa;
iii. Refund on account of assessment/ provisional assessment/ appeal/ any other order; and
iv. Refund on account of “any other” ground or reason.


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