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Mismatch in Inward and Outward supply GST rate

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Puneeth Shankar

22 Points Posted on 08 February 2023

Hello,

I have purchased goods from a registered supplier, paying "X" + 12 % GST in accordance with goods category, and I have mistakenly sold these goods on E-commerce at 18% tax because of the incorrect tax code used.

This has lead to increased tax liability for the same invoice amount(or profit), what are my options?

Replies (2)

Quick Summary

This discussion addresses a common GST issue where a business mistakenly charged a higher tax rate (18%) on outward supply than the inward supply rate (12%) for the same goods. The advice provided suggests raising a credit note to rectify the difference with the customer. Alternatively, if the excess tax collected isn't being credited back, it must be paid to the government, ensuring it doesn't impact overall profit.

Sneha Latha

Senior Assistant

218 Points Posted on 08 February 2023

Raise credit note for the difference amount of tax.

Divyam Agarwal

Practicing Chartered Accountant

959 Points Posted on 11 February 2023

If you have taken excess tax from the customer and not issuing credit note, then you should pay that excess tax to the government. This excess charge of tax will not effect your profit in any situation