Wrongly treating IGST sale as State Sale in GSTR 3B

IGST 67 views 1 replies

Hi Friends I have a query. My Client filed GSTR 3B for Nov'20 having sale Rs.100000 gross with Rs.9000 in cgst and sgst each. But later it was discovered that the sale was actually of IGST. Now, With DRC-03, will he have to pay full igst of Rs.18000 with Interest

Or

He can adjust CGST of Rs.9000 with IGST and pay Rs.9000 balance as IGST (under the scheme of setting off/netting of itc) ( also we will add 3 months Intetest). If yes, then how ??

In GSTR-1, it has been correctly claimed as IGST Sale.

Secondly, will the party get full credit of ITC in their GSTR 2A if We use the scheme of netting.

Replies (1)

Hi Abhinav,

This is a common issue where IGST sales are wrongly reported as intra-state sales attracting CGST & SGST instead of IGST.

Let me break down your concerns:


1. Nature of Mistake & Correction

  • Your client filed GSTR-3B showing CGST = 9000 + SGST = 9000, but the sale was actually an IGST sale.

  • The correct tax liability on Rs. 100,000 at 18% GST is IGST Rs. 18,000.


2. Using DRC-03 to Rectify

  • Since the liability has been under-reported for IGST, your client will have to pay the balance IGST of Rs. 9,000 (18,000 IGST - 9,000 CGST already paid) along with interest.

  • However, the CGST and SGST paid cannot be directly adjusted against IGST liability because these are different heads of tax.

  • You cannot just ‘convert’ CGST/SGST paid into IGST paid under the current law.


3. Payment Process

  • File DRC-03 to pay the balance IGST of Rs. 9,000 + applicable interest.

  • The interest is calculated from the due date of filing of GSTR-3B (Nov 2020) till date of payment.

  • CGST and SGST already paid remain as paid and cannot be adjusted or refunded unless you do an amendment/cancellation of original return (which is not allowed post due date).


4. Effect on ITC to the Buyer

  • Since GSTR-1 correctly reported the sale as IGST, the buyer’s GSTR-2A will show IGST paid of Rs. 18,000.

  • This means the buyer will get full ITC on IGST, as per original correct invoice.

  • There is no impact on buyer’s ITC in this case.


Summary:

Step Action
Wrong filing of CGST & SGST Correct in next return not possible now
Pay difference of Rs. 9,000 File DRC-03 to pay balance IGST + interest
CGST & SGST already paid Cannot be adjusted against IGST
Buyer ITC Buyer will get full ITC as GSTR-1 is correct

Additional Suggestion:

  • Going forward, maintain a proper reconciliation between GSTR-1 and GSTR-3B.

  • Inform your client about timely corrections.


CCI Pro

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