REMIDIES IF GTA HAS FOLLOWED FCM AND RCM IN THE SAME PERIOD

[CHVN KUMAR]

HI every one

Please provide your valuable opinion for the following

1. GTA has followed the same methods for invoice raising i.e., FCM and RCM in the same period.

2. Department has any right to convert entire turnover into taxable i.e, FCM

Is there any directon / provision there in the Act in this regard?

What are the remidies available for GTA in this regard

[KASTURI SETHI]

There is no remedy to this lapse. I have already replied on this issue in this forum a few months back. Filing an option for FCM is requirement of GST law. The Board has already issued clarification in the form of FAQ on this issue. Now the SCN will be issued for imposition of penalty. Differential amount of tax along with interest will also be demanded. The department has statutory power to treat the whole taxable value under FCM. Issuance of an invoice under FCM is itself an option for FCM for the financial year. Invoice is also a sort of contract.

[YAGAY and SUN]

Priciple of unjust enrichment may apply. However in recent judgment refund cannot be filed even service tax is paid inadvertently.

[KASTURI SETHI]

Rightly advised by M/s.Yagay and Sun, Sirs. Thanks & regards for offering your views on the issue. Now the picture on the issue is very much clear. It is beyond doubt that the party can not adopt hybrid procedure.

[YAGAY and SUN]

If any hybrid system is adopted then, Government will assume the tax paid on higher side was liable to be paid and any short paid tax will collected by issuance of SCN.

[KASTURI SETHI]

Dear Sir,

I am also of the same view.

AI Summary

FCM versus RCM conflict: department may treat GTA turnover as FCM and demand differential tax and penalties.
Where a GTA issues invoices under both FCM and RCM in the same period, the department may treat the entire turnover as taxable under FCM, issue a show cause notice, and demand differential tax with interest and penalties. Hybrid invoicing is treated as a lapse enabling assessment adjustment; unjust enrichment may be argued but refund prospects are limited.