Strict provision regarding credit note under GST law

- Sales Tax- Soham Mashruwala

Under the GST Act, there is a very strict provision regarding credit notes. Under Article 34, a provision has been made under which circumstances credit note can be issued. Rule 53 provides for the form of credit note. Issuance of credit notes reduces the tax liability of suppliers. It often happens that issuing a credit note results in a refund of the GST amount. Today GSTR 3B form does not allow showing negative (minus) amount for external supplies. Currently, the GST portal allows showing negative amount in GSTR 3B form in table 4 which is for taxes. A state is like a maze of a vero jantar mantra. CGST, SGST, IGST Such apportionment creates a lot of disaster for the suppliers. As the negative amount cannot be shown, the supplier cannot take back the amount paid and the account officer does not give the refund if he goes to get the refund. Today's article deals with refunds on credit notes and gross liability on credit notes at the time of GST audit assessment. It has been discussed. In this regard, a circular was issued by the government at the time of covid.

Section 54

Refund of GST paid at the time credit note is issued. Thus, the credit note results in the suppliers being overcharged. Under Section 54, a provision has been made to refund those who have paid an excess amount. Thus there is no provision that the credit note cannot be refunded.

Circular

Circular No. 137/07/2020 dated April 13, 2020 by the Government-GST clarified the amount of GST to be charged on account of credit notes in respect of service supply due to Kovid. It was stated that an amount has been advanced for supply of service and GST has been paid on it. The circular clarified that refunds can be applied for in cases where a credit note is issued after the supply has been billed or before the service is rendered. This application can be made only when no other output liability is to arise under the head of GST.

Officer's approach

It is written in the FAQ against the law by the government that refund of credit notes should not be given. When suppliers apply for refund, refund is not given by the account. When the amount of GST i.e. IGST has been offset against CGST and SGST at the time of GST audit assessment due to credit note, it is indicated that refund of IGST arising due to credit note should be applied for and the amount of CGST and SGST A bulk order is made to fill. GST has been divided by the government for its own convenience. All the same for suppliers. Due to this, wrong demand should not be imposed on suppliers and adjustments should be made.