GSTR-3B Error: Cannot Deny Excess IGST Refund: GSTAT Ruling

GSTR-3B Error: In three separate rulings, the Goods & Services Tax Appellate Tribunal (GSTAT), Bench at Thiruvananthapuram, has granted leave to Associated Cashews for its three appeals challenging the rejection of the refund claims for excess payment of IGST on export of cashew kernels.

According to the ruling published by Taxguru on October 22, 2026, the Tribunal has ruled that just because of a clerical mistake in recording the export turnover of goods under column 54 of Form GSTR-3B does not deprive the taxpayer of obtaining a refund of IGST if he/she can prove the double payment of IGST.

The appeals were for export transactions made in November 2018, December 2018, and February 2019, where the taxpayer had recorded his/her export invoices and shipping bill in GSTR-1 but wrongly reported the export turnover and IGST in form GSTR-3B.

Background of the Associated Cashews Case

Associated Cashews made exports of cashew kernels in November 2018, December 2018, and February 2019 by remitting IGST at the prescribed rate of 5% on such exports. These shipping bills and export invoices were duly filed before Customs and were properly declared by the taxpayer in their GSTR-1 returns.

Unfortunately, while filing GSTR-3B for those months, the exporter by mistake recorded the export turnover along with IGST in Table 3.1(a), which deals with outward taxable supplies except for zero-rated, nil-rated, and exempted supplies.

The export turnover had to be recorded in Table 3.1(b) in case of zero-rated outward taxable supplies. This led to an anomaly between the data recorded in the GST and Customs databases, failing the refund processing through the Customs EDI System against the initial exports.

In order to overcome this problem, the taxpayer again paid the same IGST while filing the August 2019 GSTR-3B and recorded the same in the zero-rated outward supplies table. The Customs automated system processed the refund against the latter payment.

Refund Amounts Involved in the Dispute

The refund claims related to three separate export periods.

These claims for refund were refused by the adjudicating authority through three orders dated December 18, 2020. The appeal by the taxpayer was refused by the Joint Commissioner (Appeals), CGST as well, since the exporter had already got a refund under IGST.

The question that arose here was whether the refund already received pertained to the original payment or the latter payment done in August 2019. It was contended by the Associated Cashews that the refund obtained by the exporter through the Customs did pertain to the second payment only.

Why Did the Tax Department Reject the Refund Claims?

The stand of the department was that there is a wrong entry of export turnover in GSTR-3B, which has resulted in inconsistency between the shipping bills, GSTR-1, and GSTR-3B. According to the department, it is essential to have enough evidence, including reconciliation and computation statements, to prove the first payment was excess tax. Moreover, the department said that it is essential for the taxpayer to prove that the same export IGST was paid again through the August 2019 return and has been refunded.

The initial claims for refunds were denied mainly due to inconsistency in the return and the fact that the documents do not prove excess tax payment. The tribunal, on the other hand, reviewed the returns, case papers, annexure, reconciliation statement, and submissions. It held that the first and second payments have not been separated by the previous authorities.

What Did GSTAT Thiruvananthapuram Observe?

The Tribunal held that the correct export invoices and shipping bills have been reported in the GSTR-1 form. However, the problem was in the wrong placement of the relevant export turnover into the tables of the GSTR-3B form.

From the available documentation, it appeared that the taxpayer made the IGST payments during the relevant months and made the payments for the same amount in August 2019. Later payments have been made properly and have led to the refund through the automated process of the Customs. The Tribunal held that the original payments can be qualified as overpayment of tax, as the payment of the same IGST has been made afterwards and there was a refund due to the automatic procedure of export refunds.

At the same time, it was not proved by the Revenue why the original payments cannot be qualified as overpayments, in spite of the fact that the same tax has been paid. It criticised the mechanical rejection of the appeal without an examination of the returns and reconciliation documents, considering the reporting issue to be a simple mistake in putting the information in the wrong column.

Legal Principles Considered by the Tribunal

1. Section 265 of the Constitution of India

Section 265 states that no tax can be levied or collected except under the authority of a law. The Tribunal was guided by the doctrine that the Government will not hold any money if it has been found that it has been collected in excess of the tax liability due to any procedural error.

This is evident from the judgment of the Orissa High Court in Rajendra Narayan Mohanty vs Joint Commissioner of State Tax, Cuttack, which dealt with the retention of duplicate tax payments and the principle of the constitution enshrined in Section 265. The general rule is that the tax authorities must examine whether the money in question was a liability under law.

2. Reference to Merck Life Science Private Limited

In addition, the Tribunal also took into consideration the High Court of Karnataka’s decision in the case of Merck Life Science Private Limited vs Union of India.

This case had to do with the issue of tax payment to the incorrect Government authority and the considerations for refunding payments made wrongly. In this case, the Tribunal used the line of thought relating to the liability of the Government to refund any payment which it is not entitled to hold.

These are two different cases with varying factual positions. However, they both back up the notion that payments made in excess cannot just be withheld because the payer was faced with a procedural hurdle.

3. Precedent Set in Choice Cashew Traders by Previous GSTAT Decision

The Tribunal also considered the precedent set in Choice Cashew Traders vs Commissioner of SGST, Kerala State, regarding a case involving excess GST payments and the issue of procedural hurdles not necessarily entitling the Government to retain unauthorised money paid. From the said precedent, the Tribunal held that clerical errors in filing the GSTR-3B forms were insufficient grounds to deny refund claims.

Importance of the Ruling for GST Taxpayers

This decision offers practical assistance to exporters and other taxpayers who experience problems with their GST returns. Prepare correct reconciliation statements. A taxpayer applying for a refund should provide clear information regarding how the initial payment, secondary payment, and the refund are connected.

Provide information about the exports and the transportation: Shipping bill, export invoice, GSTR-1, GSTR-3B, payment challan, and customs refund statements may be used to trace transactions.

Determine the exact payment to which a refund should be applied: If a single transaction involves several payments, the taxpayer’s application for a refund should indicate whether all the payments have been refunded or not. Provide explanations in response to notices and submit necessary documents. An elaborate explanation together with the documents may help the authority determine the nature of the claim and avoid litigation.

Do not think that all clerical errors will be enough to receive the refund: In this particular case, the decision was made based on documents proving the duplicate payment. Another case may produce a different outcome due to the inability of the taxpayer to prove his/her right to receive a refund.

Rebuttals must be backed up by evidence: The written documentation, together with an appropriate written explanation thereof, might assist the authority in comprehending the nature of the claim to prevent any litigation.

It should not be assumed that all errors in documentation will lead to a refund. This case was determined based on the evidence provided in the documentation regarding duplication of payments. Every case may have different outcomes.