Wrong report of liability, claiming back

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Mohan Kale

400 Points Posted on 24 June 2023

I have a query regarding reversing or claiming refund of GST liability wrongly reported. The facts are as under:
1. Out of total 10 invoices in May 2023, 4 tax invoices were without GST for the service actually covered under RCM.
2. While filing GSTR-1 for May 2023, the said 4 invoices were wrongly reported with tax as though under FCM (along with other 6 tax invoices).
3. Now while filing GSTR-3B for May 2023 this wrongly reported liability for 4 invoices will be set off against available ITC.

Query is whether the utilized ITC will get reversed and restored if while filing GSTR-1 amendment is reported with zero tax (RCM) on the said 4 invoices or credit note requires to be raised? Or what is the correct procedure to restore this ITC ?

Replies (4)

Bhanu

hyderabad

1653 Points Posted on 24 June 2023

In june, there are two options you can do.either you can issue credit notes or ammend them.The option to select will depends on how they are accounted in books of accounts.
case1)if that 4 invoices also has wrongly entered in books of accounts
raise credit notes for that invoices in june and issue new invoices without tax (both in books and upload them in gstr1 june month).
case2)if that 4 invoices has entered with out tax in may in books of accounts, they you need to ammend them in june3b.

*Effect on ITC already used:
In june return the output tax will automatically adjusts with june output tax.so no need to worry.(same effect will be there for both cases stated above)

Mohan Kale

400 Points Posted on 24 June 2023

Thanks for reply. The bills are accounted correctly in book kf accounts, o ly GSTR-1 reporting is wrong.
So, you mean to say is just by showing amendment in GSTR-1 of June 2023 the utilized ITC will get reversed right?

Bhanu

hyderabad

1653 Points Posted on 24 June 2023

Yes
here is an example which may clarify your doubt.
for example In may you paid excess tax of rs100.
You had output tax liability of rs 1000rs in june month.
if you ammend those bills,they in gstr3b the tax liability will autopopulate as 900(1000 june liability minus 100 ammendment).
So it will get adjusted.