1. My client is dealing in taxable and exempted goods. The customers are mainly B2C.
2. The outward supplies is declared in GSTR-1 of March 2022 and returns are filed.
3. Recently came to know that some of the taxable invoices are required to issue credit notes amount in Rs. 92,00,000.
4. In the month of July there was taxable outward supplies of Rs. 1,05,000 for which we have issued taxable invoices filed GSTR-1, filed the GSTR-3B and paid the taxes.
5. During the month of August and September there is no taxable supplies.
6. We have to issue credit note for RS. 92,00,000 for the month of March 2022
7. There is amendment in sec 34 (2), from which date it is applicable.
What is the remedy for the credit note of taxable supplies for the month of March 2022.
Can we rectify GSTR-1 and GSTR-3B for the above adjustment, is any way out for the output tax on the wrong taxable invoice issued during March 2022.
Kindly provide me the fees to be paid for above consultation. I have to file tax audit report for the 2021-22 I required information your guidance at the earliest madam.
K G ANANTHA RAO
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If u have not charged gst from customer ,u can issue credit note with evidence of refund of excess amount charged . You may show it column 9 and 10 of GSTR-1.
This is information purpose only
If subject supplies are NOT 'Taxable outward inter-State supplies to un-registered persons where the invoice value is more than ₹ 2.5 lakh', credit-notes u/s 34 (2) can be issued against BtoC supplies made in March, 2022 and same can be shows in Table 7 of Form GSTR-1 i.e. Taxable supplies (Net of debit notes and credit notes) to unregistered persons other than the supplies covered in Table 5. Here, Form GSTR-1 can be filed showing "negative figures" (net-off figures) considering that there is no such supply in current month.
If subject supplies are 'Taxable outward inter-State supplies to un-registered persons where the invoice value is more than ₹ 2.5 lakh', credit-notes u/s 34 (2) can be issued against BtoC supplies made in March, 2022 and same can be shows in Table 9B of Form GSTR-1.
It is true that u/s 34 (2), you need to disclosure such credit-notes in the 'return' when they are issued and same should not be not later than 5[the thirtieth day of November] following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier. And it is also true that Form GSTR-1 is not return u/s 39 but Form GSTR-3B is.
And if you are NOT having sufficient turnover from current month till Nov, 22, you will not be able to show these credit-notes in "return" though required u/s 34 (2). However, reason for your non-disclosure is that while making adjustment in the output tax liability or input tax credit, there can be no negative entries in the FORM GSTR-3B.
Hence, you can use Circular No. 26/26/2017-GST dated 29th December, 2017 to defend above non-disclosure. It is not your fault that present return (in form GSTR-3B) does not allow you to disclosure these credit-notes in return/s for the period permitted u/s 34 (2) in peculiar circumstances of yours. Hence, disclosure in form GSTR-1 should be sufficient for requirements of Section 34 (2) even though GSTR-1 is not a return. And as and when you have taxable suppliers in future, you can net-off the same against above-said credit-notes while filing Form GSTR-3B as allowed for earlier-said circular.
P.S. Please note the proviso u/s 34 (2) which states that 'no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person'. For above views of mine, it is presumed that facts of your case has not resulted into passing of the incidence of tax and interest on such supply to any other person.
These are ex facie views of mine and the same should not be construed as professional advice / suggestion.
Thank you sir,
It is NOT ' Taxable Interstate Supplies', It is only intrastate supplies to unregistered persons..
Thank you sir
What is the reason for the issue of the credit note?
One way is to disclose this is disclose the effect of this credit note in GSTR-1, adjust it in GSTR-3B as and when turnover is available for adjustment.
However, if the credit note is required to be issued due to wrong disclosure in the earlier months then an amendment can also be looked at in GSTR-1 and a refund.