Tax wrongfully collected and paid to Central Government or Union territory Government
UTGST s.12, UTGST Act
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In one line
If you treated a supply as intra-UT and paid CGST plus UTGST and it is later held to be inter-State, you get a refund of what you paid and pay IGST with no interest; the same protection works in reverse. This is what saves an honest classification error from becoming an interest exposure.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
The UTGST counterpart of section 77 of the CGST Act and section 19 of the IGST Act – refund of the wrongly paid head with no interest on the correcting payment.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
705 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(1) A registered person who has paid the central tax and the Union territory tax on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed.
(2) A registered person who has paid integrated tax on a transaction considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall not be required to pay any interest on the amount of the central tax and the Union territory tax payable.
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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