COMPOSITTION SCHEME DELAER IF WRONGLY ISSUED TAX INVOICE

[TM ARJUN]

SIR,

RAMESH OPTED TO COMPOSITION SCHEME DEALER GST ACT AND WRONGLY ISSUED B2B TAX INVOICE TO MUGESH. CAN RAMESH ISSUE CREDIT NOTE TO MUGESH FOR REFUND OF FULL TAX AMOUNT WRONGLY COLLECTED, FOR THE PURPOSE OF CONTINUE AS COMPOSITE DEALER SCHEME.

AI Summary

Dealer Can Issue Credit Note for Wrong Tax Invoice Under GST Composition Scheme, Penalty Possible for Invoice Errors. A dealer, initially registered as a regular dealer under the GST Act, mistakenly issued a B2B tax invoice while opting for the composition scheme. The query concerns whether the dealer can issue a credit note to refund the wrongly collected tax and continue under the composition scheme. Responses suggest that issuing a credit note is permissible, but if the dealer fails to declare their composition status on invoices, a penalty of 10,000 may apply. If the error is self-corrected without departmental intervention, penalties might be avoidable. The dealer's GST portal reflects composition status inconsistently, complicating return filing.