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Late filing GST Credit Note

Shruti Arora (CA Practice ) (76 Points)

15 May 2021

One client (manufacturer) returned Raw Material in July 2020 to his supplier on Delivery Challan (Taxable Amt - 1,00,000/-)

The supplier didn't upload GST Credit note since August 20 return period till April 2021.Now uploaded GST credit note in his GSTR1 for April 2021.

My client (recipient) didn't reverse input credit till April 2021 return period.

Now I want to know if interest is liable to be paid by my client ? If yes, then at what rate ?

Regards

Shruthi.

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6 Replies

Ravinder Singh (Direct & Indirect Taxation professional) (110 Points)
Replied 15 May 2021

Interest Rate will be applicable from August 20 to March 21 @ 18% P.A

Shruti Arora (CA Practice ) (76 Points)
Replied 15 May 2021

Thanks Ravinderji

But I want to understand why interest is applicable in this case since Credit Note entered in GST portal in April, and ITC reversal also done in April ?

Surely the supplier couldn't have reduced his Output tax liability in August 2020 without having entered in GSTR1 ?

Please explain and oblige

Regards

Shruthi

Ravinder Singh (Direct & Indirect Taxation professional) (110 Points)
Replied 15 May 2021

Because of material returned in July-20 on delivery challan and Credit Note should be issue in respective month also input credit should be reversed by the Receiver.

Where goods are being transported to the recipient but the tax invoice could not be issued at the time of departure of the goods. under Rule 55(4) of CGST and SGST Rules, 2017 stats that the supplier can issue a tax invoice after delivery of goods

The time for issuing invoice would depend on the nature of supply viz whether it is a supply of goods or services. A registered person supplying taxable goods shall, before or at the time of removal of goods (where supply involves movement of goods) or delivery or making available thereof to the recipient, issue a tax invoice showing the descripttion, quantity and value of goods, the tax charged thereon and such other particulars has been prescribed in the Invoice Rules.