RCM / FCM

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This query is : Resolved

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A GTA business, operating under the Reverse Charge Mechanism (RCM) but mistakenly issuing invoices under the Forward Charge Mechanism (FCM) for the 2019-20 financial year, is seeking advice. The party paid the GST charged, accounted for it in their returns, and has now received a notice from the department for ineligible credit. The GTA wants to know if they can rectify these past invoices in the current year or through the annual return to resolve the issue for their party.

sankar ponnan

sankar ponnan (Querist)
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19 December 2020 SIR
We are GTA (Not Opting GST 5% Or 12% ) and running the business under REVERSE CHARGE BASIS. Our party will pay GST on the services to be provided by us.
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During the last year (2019-20), We had issued the sale invoices to our party on the basis of FORWARD CHARGE MECHANISM by charging GST @ 12% as requested by the party. We collected the same from Party. Party accounted the invoices in their GST Return whereas we failed to do the same due to lack of knowledge of accountant. Also the party notice from department for that ineligible credit.

Now Party asking GSTR1 Returns with us. Hence, we want to account the sale invoices during the current year. Can we do it? If yes, Will it clear the issue of Party?
OR Can we add the sales details in Annual return (2019-20)?
Plz Clear my doubt
thanks in adv

Lekhraj sood

Lekhraj sood (Expert)
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19 December 2020 You can account now, file GSTR1 and pay the tax with interest from the date of invoice.

sankar ponnan

sankar ponnan (Querist)
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19 December 2020 Sir
If we do the same in current year, Will the input pass to the account of buyer ?
Plz...

Lekhraj sood

Lekhraj sood (Expert)
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19 December 2020 You said in your query that the customer has accounted for this invoice.It implies he would have taken the credit.However,if he has not taken the credit then he will not be able to take.But if he has taken the credit before september 20 then his credit will be intact.

sankar ponnan

sankar ponnan (Querist)
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19 December 2020 Ok Sir thank you very much

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