PAYING IGST ( THROUGH CUSTOMS ) UNDER PROTEST & AVAILING INPUT CREDIT
We know about paying customs duty under protest and I have written separate article how to pay customs duty under protest. Now let us think of a situation like below ;
An Importer ( trader ) pays IGST @ 18% “UNDER PROTEST”. In his view, he strongly believes that the rate applicable is @ 12% only. Then he resells the product in local market with GST @ 12%
He has claimed input credit of IGST 18% paid on imports. Whether he is right on paying IGST under protest and at the same time claiming input credit of it ?
In general, there is no specific provision for payment of GST under protest. But In GTL Infrastructure Limited Vs The State Of Chhattisgarh HIGH COURT OF CHHATTISGARH upheld the payment of GST under protest and declared that “Taking into such fact, the petitioner is fair to deposit the difference amount under protest”
Making duty payments under protest is an integral part of principles of natural justice and this matter related to imported goods under Customs Laws hence IGST can be deposited under Protest.
Section 155 of Central Goods and Services Act 2017 - Burden of proof - Where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person. Hence in our view there is no harm in taking input credit of the IGST paid and suggested to keep the track of 'IGST under protest'
If he has not paid IGST under protest also there is another option for refund under inverted duty structure in case of accumulated ITC. Inverted tax structure refers to a condition where the tax rate on inputs is higher than the tax rate on the outputs for sale. Instead of paying IGST under protest importer has another option of refund under this method.