Penalty for for reposting sales for which All advance received are not shown at GST paid for.

This query is : Resolved

Sudipta Das (Querist)
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17 August 2024 Under construction property sold for 6400000 received money in 3 installments of 2400000 lakhs, 2000000 lakhs and 2000000 lakhs before the sale deed is registered. All advances are shown in GST and GST is paid but the sales entry and adjustment with advance is not done. Is there ant interest or penalty payable for the same. Sale Date : 17-08-2023. Amendment for rectification will be done in August 2024.

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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12 August 2025 Here’s a detailed explanation about the penalty and interest implications for not properly reporting sales with advance received under GST:
1. Background
Property sold for Rs. 64,00,000.
Advances received in 3 installments: Rs. 24,00,000, Rs. 20,00,000, Rs. 20,00,000.
GST paid on advances received (correctly shown in GST returns).
But the sales entry and adjustment of advances with final sale not recorded in GST returns.
Sale deed date: 17 August 2023.
Rectification/amendment planned in August 2024.
2. GST on Advances and Sale
GST on advances must be paid when advance is received.
On final sale, adjustment of advances is required so that output tax on entire sale value is accounted for, and advances are adjusted against sale consideration.
If sales entry is not done or advances not adjusted properly, it leads to under-reporting of sales and GST liability.
3. Interest on Late Payment of GST
Interest under Section 50 of CGST Act is payable on unpaid tax from the date tax was due until the date of payment.
Since GST on advances is paid, but final sales entry and adjustment not done, difference between total GST due on sale and GST paid on advances is payable along with interest.
Interest is calculated at 18% per annum on the short-paid amount.
4. Penalty for Late or Non-Reporting
Penalty depends on the facts and whether the omission was willful or due to negligence.
If the tax is paid with interest, usually no penalty is imposed if the taxpayer voluntarily corrects the mistake before any audit or investigation.
Under Section 73 and 74 (for non-payment of tax), penalty can be levied up to 10% or 100% of tax, but typically waived if tax + interest is paid timely and voluntarily.
For late filing of returns or mistakes, late fees may be applicable:
Rs. 50 per day (CGST) + Rs. 50 per day (SGST) subject to maximum Rs. 5,000 per return.
5. What Should You Do?
File amended returns (GSTR-1 & GSTR-3B) reflecting the correct sales and adjustments.
Pay any additional GST due along with interest from 17 Aug 2023 to date of payment.
File a voluntary Rectification application before the tax authorities initiate any proceedings.
Maintain proper documents supporting the correction.

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