Manager - Finance & Accounts
58126 Points
Joined June 2010
Hi Sarathy,
Thank you for the detailed query — you're clearly tracking the GSTR-1 filing sequence carefully. Let's break it down and address your main concern:
📌 Summary of Events (Chronologically):
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Dec 2021 – An invoice was incorrectly marked as "Supply Attracting Reverse Charge" in GSTR-1.
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Jan 2022 – Amendment was made, but again marked as reverse charge (same as Dec).
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March 2022 –
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A regular invoice (correct type) issued for the same value.
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A credit note was raised against the Dec 2021 bill (now correctly tagged as a regular supply).
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Both entries (March invoice and credit note) were filed in GSTR-1 — making it a contra transaction.
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June 2022 – The credit note was amended and marked as reverse charge.
❓ Your Main Question:
Is the customer eligible to claim ITC of the March 2022 invoice, considering all these adjustments?
✅ Short Answer:
Yes, your customer should be eligible to claim ITC on the March 2022 regular invoice, provided:
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The invoice is not marked as reverse charge in your final GSTR-1 (March return).
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The credit note (amended in June) doesn't reduce the customer's ITC erroneously by marking it under reverse charge, as RCM supplies don’t allow ITC to recipients.
⚠️ Things to Double Check:
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✅ In March 2022 GSTR-1, the invoice must be shown as a regular supply, not reverse charge.
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⚠️ The credit note, which was later amended (June) as reverse charge, may create confusion.
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If the credit note reverses the ITC because it's under RCM, it can lead to mismatch in GSTR-2A/2B of the customer.
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This may result in ITC not reflecting in the customer’s system or being flagged in assessment.
📝 Recommendation:
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Consider revising the credit note again, or issuing a new corrected credit note that reflects proper supply type (i.e., not RCM).
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Communicate with the customer and check their GSTR-2B for March — if the invoice appears correctly, they can safely avail ITC.
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If there’s a mismatch, a proper reconciliation or clarification may be required during assessment or audit.
📩 Suggestion:
You may also write to the GST helpdesk or consult with your jurisdictional officer if system corrections are not reflecting properly.