Question

I have filed refund application for inverted tax structure month of aug-2018

my question is I have credit balance in igst- 735662 /- cgst balance is -252824 /- and sgst credit balance is- 252824/-

but i have submit refund application & not claimed IGST amount in rfd -01 but claimed- cgst-620655/- and sgst- 620655/- so gst officer not allow this refund application and deficiency memo against this application.
 

Answer

Facts of the case:
Balance of credit balance in various ITC accounts and you have filled refund of SGST and CGST. Refund claim was rejected.

Law Applicable:
Under circular 59/2018 dated 4th September 2018 Para3.2 dictates that
"After calculating the least of the three amounts, as detailed above, the equivalent amount is to be debited from the electronic credit ledger of the claimant in the following order:
a) Integrated tax, to the extent of balance available;
b) Central tax and State tax/Union Territory tax, equally to the extent of balance available and in the event of a shortfall in the balance available in a particular electronic credit ledger (say, Central tax), the differential amount is to be debited from the other electronic credit ledger (i.e., State tax/Union Territory tax, in this case)."

Interpretation:
Circular 59/2018 has specified that the priority order of refund of tax shall be:
1.First from IGST account
2. Balance from CGST and SGST account

Since you still have 735662 /- balance in your IGST account, the refund shall first be granted out of that account.

Conclusion:
You are advised to claim refund of IGST account. When this account is completely exhausted then CGST and SGST account can be used for refund.
Note- Also attached with this mail is the relevant circular. (Reply dt.27/03/2019)