Debit note for differential tax payment

[Nikhil Virkar]

Dear Sir, How to prepare debit note for differential tax payment of 10% (18% -28%) which suffice criteria w.r.t IRN generation, GSTR1 upload and entires in the books of accounts. Please guide.

[Shilpi Jain]

Mention in the debit note the taxable value as per the invoice issued earlier. Mention the tax rate as 10% on this.

While filing GSTR-1 you could have an issue in mentioning the 10% tax rate. There you could mention the original tax rate (i.e. 28%) but then you should edit the tax to match it to 10%. Also make the taxable value as 0.1 so that you would not have year end reco issues in GSTR-9C.

Also suggested to make an intimation to to the dept regarding the transaction and the manner in which it has been disclosed in the returns since the portal does not allow disclosing 10% tax value in the GSTR-1

[Nikhil Virkar]

Dear madam, invoice prepared with GST@ 10% would have issue while IRN i.e e-invoice generation. Request to suggest any other option.

[Shilpi Jain]

It would be a peculiar issue where the portals do not allow assessee to comply with the law. You could issue the debit note in the IRP the manner in which it allows, then edit it while filing GSTR-1. Also make an intimation to the department regarding the difficulty faced and the manner in which you have tackled the disclosure.

This is the best I can think of in this situation.

[Nikhil Virkar]

Thanks madam. Aligned with your views. Law provisions does not aligned with portal options and hence we ourself need to find out the way within the boundaries of Law. No proper answer is also received from GSTIN helpdesk.

AI Summary

GST differential tax compliance: issue a debit note reflecting original taxable value and notify department when portal limits force adjustments. Issue the debit note stating the original taxable value and the differential tax rate; generate the IRN as the portal permits and thereafter adjust the GSTR 1 entry (by referencing the original invoice rate and editing tax to reflect the differential) to secure correct accounting treatment and reconciliation, and send an intimation to the tax department explaining the portal limitation and the disclosure approach adopted.