GST - SHORT PAYMENT - HOW TO ADJUST

[SAFETAB LIFESCIENCE]

Dear Experts,

Good Morning. Hope every one are all safe and doing well. Please be safe.

We are manufacturing Hand Sanitizers and selling with 12 % GST. Now, GST special wing requested us to charge only 18% as per clarifications given by GST council on 15.07.2020 through press release and instructed us to pay the differential tax of 6 % and interest. We have not been issued any letter or notice to pay the tax.

We are planning to pay the differential tax in Electronic Credit Ledger and Interest amount by Cash chalan and intimate through DRC-03 for this voluntary payment.

After that, we are planning to raise the Debit Note to our customers who are all accepting for the differential tax. If so, we have to post the Debit Notes in our GSTR-1 and then only they can get ITC,. If we posted in our GSTR-1, then our liability will increase again. Since the differential tax is already paid by us and intimated through DRC-3, we need not to pay again and how to reduce the liability of the GST in GSTR-1 or in the GSTR-3B. What is the procedure to reduce the liability of GST arise through posting of our Debit Note for the Tax paid already.

We humbly request the experts to clarify our doubt at the earliest and oblige.

[Surjeet Singh]

As you have mentioned that you are planning to pay the differential tax of 6%, for doing same you need to issue Debit Note which will increase you output liability for the earlier invoice issued at lower rate. This will increased liability which can be discharged by GSTR 3B.The implication of above adjustment should be given in one tax period.

If you have any further queries contact me on 9905126744.

[DR.MARIAPPAN GOVINDARAJAN]

The outcome may be informed in this forum.

AI Summary

GST short payment adjustment increases output liability; issue debit note and discharge liability via GSTR 3B within same tax period. Issuing a debit note to correct tax on an earlier invoice increases the supplier's output tax liability for that invoice; the increased liability can be discharged through GSTR-3B and such adjustments should be reflected within the same tax period. The taxpayer proposes paying the differential tax to the Electronic Credit Ledger and interest by cash challan under DRC-03 before issuing debit notes.