Tax wrongfully collected and paid to Central Government or State Government
IGST s.19, IGST Act
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In one line
If you treated a supply as inter-State and paid IGST and it is later held to be intra-State, you get refund of the IGST and pay CGST and SGST with no interest on the correcting payment; the same protection works in reverse. This is the section that stops a genuine classification error from becoming an interest and penalty exposure.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Read with section 77 of the CGST Act and Rule 89(1A): the refund of the wrongly paid tax is claimable within two years of PAYING the correct tax, and no interest is chargeable 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
707 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 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.
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 If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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