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.

[DR.MARIAPPAN GOVINDARAJAN]

In my opinion, you can do so.

[KASTURI SETHI]

Yes. No problem. I support the view of Sh.Maraippan Govindarajan, Sir.

[TM ARJUN]

THANK YOU VERY MUCH SIRS FOR YOUR IMMEDIATE REPLIES FOR BOTH MR. M.G AND MR. K.S

[Ganeshan Kalyani]

In my view, there is penalty of ₹ 10,000/- if composition dealer does not mention declaration on inovice that he is a composition dealer and not authorised to collect tax.

[Ganeshan Kalyani]

Every composition taxable person shall mention on every bill of supply the words as "Composition Taxable Person noy eligible to collect tax on ".

[KASTURI SETHI]

If mistake is rectified by an asseessee on its own I.e. without being pointed out by the department. No penalty is impossible.

[TM ARJUN]

THANK YOU, MR. GANESHAN KALYANJI BUT I WANT TO EXPLAIN THE FACT OF THIS PROBLEM, THE DEALER WHILE REGISTER HIS BUSINESS UNDER GST ACT AS A REGULAR DEALER ACCORDINGLY HE ISSUED TAX INVOICE AND COLLECTED TAX. AFTER GOVERNMENT NOTIFICATION, A DEALER FREE FOR WHO WANTS TO CHANGE UNDER COMPOSITION SCHEME WITH EFFECT FROM NEXT MONTH 1 ST DAY ONWARDS, ACCORDINGLY HE CHANGED AS COMPOSITION DEALER IN HIS SITE. BUT FROM 1ST NOVEMBER ONWARDS HIS GST SITE DISPLAYS COMPOSITION OPTION FROM JULY-SEP AS WEL OCT-DEC. SO THERE IS NO OPTION TO FILE RETURN AND PAY COLLECTION OF TAX AS REGULAR DEALE., HENCE HE WANTS TO ISSUE CREDIT NOTE BY RETURN TAX AS WEL CONTINUE AS COMPOSITION SCHEME. HERE AS PER VIEW OF MR K.SETHIJI, THERE IS NO ANY RETURN FILED EITHER SIDE. PLEASE GIVE YOUR SUGGESTION.

AI Summary

Composition scheme: wrongly issued tax invoice may be corrected by issuing credit note to refund collected tax.
A composition-scheme registrant who erroneously issued a B2B tax invoice may issue a credit note to refund the tax wrongly collected to preserve composition status, provided returns and records are adjusted. The registrant must ensure every bill bears the required declaration that a composition taxable person is not eligible to collect tax; omission can attract penalty, though voluntary self-correction prior to departmental action may mitigate penalty risk.