Difference in "Tax liability and ITC statement (Summary)"
This query is : Resolved
24 January 2021
Dear Sir/Mam,
I have filled GST Return for 2nd Qtr. 2020-21. I file GSTR 1 on Quarterly Basis.
Now, I found that there is difference in Tax liability and ITC Statement (Summary). There is excess amount in GSTR3B.
Reason: In GSTR 3B, I have taken amount of Credit Note as Input Tax Credit instead of subtracting from total sale. In Sep 2020, I have no sale bill, there is only credit note. Thus, I didn't showed negative Credit Note value in Table 3.1 of GSTR 3B. But in Quarterly GSTR1, it is taken under Credit Note. Thus, Value of Total sale is showing less in GSTR1.
Please guide, whether I have done right ? Is there any chance of Notice from department ?
I hope question is clear to you, if there is any query, please write back and do the needful.
I have filled GST Return for 2nd Qtr. 2020-21. I file GSTR 1 on Quarterly Basis.
Now, I found that there is difference in Tax liability and ITC Statement (Summary). There is excess amount in GSTR3B.
Reason: In GSTR 3B, I have taken amount of Credit Note as Input Tax Credit instead of subtracting from total sale. In Sep 2020, I have no sale bill, there is only credit note. Thus, I didn't showed negative Credit Note value in Table 3.1 of GSTR 3B. But in Quarterly GSTR1, it is taken under Credit Note. Thus, Value of Total sale is showing less in GSTR1.
Please guide, whether I have done right ? Is there any chance of Notice from department ?
I hope question is clear to you, if there is any query, please write back and do the needful.
06 July 2024
Based on your description, it appears that you have correctly identified the issue in your GST filings for the 2nd quarter of 2020-21. Here are the key points and guidance:
1. **Issue Identified**: You have incorrectly treated the credit note amount as Input Tax Credit (ITC) in GSTR 3B instead of reducing it from the total sales. This has resulted in an excess amount of ITC in your GSTR 3B.
2. **Correct Approach**:
- Credit notes should be reflected in Table 3.1 of GSTR 3B as negative sales (reduction from total sales) for the respective tax period.
- In GSTR 1, credit notes should be reported under the appropriate sections to reflect adjustments in the total sales.
3. **Rectification Steps**:
- **GSTR 3B**: Since you have already filed GSTR 3B for the relevant quarter, and you realize the error, you should rectify it in the subsequent GSTR 3B filings if applicable. For the past quarters, you may consider whether an amendment or rectification is necessary based on the magnitude of the error.
- **GSTR 1**: Ensure that future GSTR 1 filings correctly reflect credit notes as reductions from total sales.
4. **Potential Consequences**:
- While the mistake is noted and corrected by you, if the department identifies discrepancies during their scrutiny or audit, they may issue a notice seeking clarification or correction.
- To preempt this, ensure that your subsequent filings (GSTR 3B and GSTR 1) accurately reflect credit notes as per GST rules.
5. **Recommendations**:
- Review your records to ascertain the impact of this error on your overall GST liability and ITC claims.
- Consult with a GST professional or accountant to determine if any amendments or rectifications are necessary for past filings.
- Maintain clear documentation to support your adjustments and corrections made in subsequent filings.
By taking these steps, you can align your GST filings with regulatory requirements and reduce the risk of any notices or penalties from the tax authorities. If you have further questions or need specific advice, consider reaching out to a tax consultant for personalized guidance.
1. **Issue Identified**: You have incorrectly treated the credit note amount as Input Tax Credit (ITC) in GSTR 3B instead of reducing it from the total sales. This has resulted in an excess amount of ITC in your GSTR 3B.
2. **Correct Approach**:
- Credit notes should be reflected in Table 3.1 of GSTR 3B as negative sales (reduction from total sales) for the respective tax period.
- In GSTR 1, credit notes should be reported under the appropriate sections to reflect adjustments in the total sales.
3. **Rectification Steps**:
- **GSTR 3B**: Since you have already filed GSTR 3B for the relevant quarter, and you realize the error, you should rectify it in the subsequent GSTR 3B filings if applicable. For the past quarters, you may consider whether an amendment or rectification is necessary based on the magnitude of the error.
- **GSTR 1**: Ensure that future GSTR 1 filings correctly reflect credit notes as reductions from total sales.
4. **Potential Consequences**:
- While the mistake is noted and corrected by you, if the department identifies discrepancies during their scrutiny or audit, they may issue a notice seeking clarification or correction.
- To preempt this, ensure that your subsequent filings (GSTR 3B and GSTR 1) accurately reflect credit notes as per GST rules.
5. **Recommendations**:
- Review your records to ascertain the impact of this error on your overall GST liability and ITC claims.
- Consult with a GST professional or accountant to determine if any amendments or rectifications are necessary for past filings.
- Maintain clear documentation to support your adjustments and corrections made in subsequent filings.
By taking these steps, you can align your GST filings with regulatory requirements and reduce the risk of any notices or penalties from the tax authorities. If you have further questions or need specific advice, consider reaching out to a tax consultant for personalized guidance.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN REDEVELOPED FLAT
- CLOSING STOCK QUERY
- Requirement under FEMA &RBI
- REGARDING ITR FILING QUESTION
- Gst reverse charge mechanism to be claimed in the month of payment
- Itr processing refund
- Multiple payment of self assessment tax for A Y 2025-2026
- Query regarding TDS on EPFO Higher Pension Arrears- under wrong section
- ITC BENEFIT ON BROKRAGE PAID
- Technical Glitch in ITR-4 Online Form (AY 2026-27): Sec 44AE Partner Remuneration not mapping to E8
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
