Wrong GST Rate Charged on Rotavator After GST Rate Reduction

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This query is : Resolved

Javed Memon (Querist)

09 October 2025 The Government has reduced the GST rate on Rotavator from 12% to 5% w.e.f. 23 October 2025. However accountant has issued invoices with E-Way Bill on 25 October 2025 (after the rate change) charging 12% GST instead of the applicable 5%. Buyers are Composition and Unregistered Dealer

How to Rectify this Mistake

Taxable Value- 80000
GST - 9600
INVOICE VALUE - 89600

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

09 October 2025 Neither composition dealers nor unregistered dealers are eligible to take credit; the main concern is correcting the invoice value and refunding any excess GST collected.

The supplier must communicate the credit note and refund/adjust the excess GST portion directly with the buyer.

Rectification Procedure
Issue a Credit Note: The supplier (your business) should issue a credit note to the buyer, referencing the original invoice, reducing the excess tax charged from 12% to the correct 5%.

Report in Return: The details of the credit note should be declared in the GST return (generally GSTR-1) for the month or quarter in which the credit note is issued.

Invoice Correction Time Limit: Such corrections can be made until November 30 of the following financial year or the date of filing the annual return, whichever is earlier.

Calculation for Rectification
Taxable Value: ₹80,000

Correct GST (5%): ₹4,000

Already charged GST (12%): ₹9,600

Excess GST to be credited: ₹5,600

After credit note:
Revised Invoice Value: ₹84,000 ( with 4,000 GST)

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