Section 19 of The Integrated Goods and Services Tax Act, 2017
- (1)A registered person who has paid integrated tax on a supply considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed.
- (2)A registered person who has paid central tax and State tax or Union territory tax, as the case may be, on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall not be required to pay any interest on the amount of integrated tax payable.
Summary
- If a registered business pays integrated tax on a sale they thought was between different states, but it is later held to be a sale within a single state, they will get a refund for that paid integrated tax.
- The refund of the wrongly paid integrated tax is given in the manner and subject to the conditions that are officially set.
- If a registered business pays central tax and state or Union territory tax on a transaction they thought was within a single state, but it is later held to be a sale between different states, they do not have to pay any interest on the integrated tax that is payable.
Practical examples
FAQ
1. What happens under Section 19 of the Integrated Goods and Services Tax Act, 2017 if a registered business wrongly pays integrated tax instead of central and state tax?
Under Section 19 of the Integrated Goods and Services Tax Act, 2017, a registered person who pays integrated tax on an inter-State supply that is subsequently held to be an intra-State supply will be granted a refund of the integrated tax so paid.
2. If a registered person pays central and state tax instead of integrated tax, do they have to pay interest on the integrated tax when the error is corrected under Section 19 of the Integrated Goods and Services Tax Act, 2017?
No, under Section 19 of the Integrated Goods and Services Tax Act, 2017, a registered person who has paid central tax and state or Union territory tax on an intra-State supply subsequently held to be an inter-state supply is not required to pay any interest on the integrated tax payable.
3. Is the refund of wrongly paid integrated tax under Section 19 of the Integrated Goods and Services Tax Act, 2017 subject to any conditions?
Yes, Section 19 of the Integrated Goods and Services Tax Act, 2017 specifies that the refund of the integrated tax will be granted in such manner and subject to such conditions as may be prescribed.
4. Does the interest waiver under Section 19 of the Integrated Goods and Services Tax Act, 2017 apply to unregistered persons?
No, Section 19 of the Integrated Goods and Services Tax Act, 2017 explicitly applies only to a registered person who has paid the tax on the supply.
Test yourself
Q1.Under Section 19 of the Integrated Goods and Services Tax Act, 2017, what is the consequence if a registered person pays integrated tax on a transaction they treated as an inter-State supply, but it is later held to be an intra-State supply?
Q2.Under Section 19 of the Integrated Goods and Services Tax Act, 2017, if a registered person pays central tax and state tax on a transaction they believed was an intra-State supply, but it is later held to be an inter-State supply, what interest is due on the integrated tax payable?
Q3.To whom does the interest waiver under Section 19 of the Integrated Goods and Services Tax Act, 2017 apply when a transaction is subsequently held to have the opposite supply nature?
Q4.How do the definitions of inter-State supply under Section 7 and intra-State supply under Section 8 of the Integrated Goods and Services Tax Act, 2017 trigger the application of Section 19 of the same Act?
Q5.Under Section 19 of the Integrated Goods and Services Tax Act, 2017, what is required of a registered person who mistakenly paid central and state tax on what is actually an inter-State supply?