Credit Notes raised in March 2019 to rectify double invoices uploaded in Sept 2018

[Varsha Nagrani]

I am currently facing a GST Department Audit where The tax practitioner of assessee had made a clerical error while filing GSTR-1 for Sept 2018. And recorded double invoices for all the B2B parties. However. He realized his error and rectified it by uploading credit notes for the same in March 2019. However, there was no effect whatsoever in GSTR-3B or GSTR 9 or in Books of assessee.

In such case, we are contemplating that the officer should consider the fact as error in filing of return. However, he is not considering the fact that Credit notes could have been raised.

Also, as there is no liability and just an error should interest be levied on difference in outward supply in GSTR-1 and GSTR-3B

[Padmanathan KV]

From the querry, it can be understood that the tax practitioner of the assessee has made two errors:

1. Duplication in B2B invoices in Sept 2018 GSTR-1 (assumed that invoices have been correctly issuedd).

2. Declared credit note in March 2019 GSTR-1 against the above duplicate invoices.

Ideally, the tax practitioner should have amended the B2B invoices of Sept 2018 GSTR-1 and removed the duplicate invoices. It maybe noted that credit note is not a document to correct the duplication in GSTR-1. Therefore, there will not be much force in challenging the rejection of credit note by the department.

Nevertheless, department cannot demand tax on the basis of duplication in GSTR-1. You may rely on the tax invoice raised, sales register etc to establish the actual sale and the mistake in GSTR-1 was only clerical. No interest can be levied as there is no liability.

Practical experience: when handling a similar issue, the officer asked for a certificate from the CA of recipients to the effect that recipients have availed ITC only once.

[Varsha Nagrani]

What if there are more than 100 parties. It will not be practically possible to have declaration from all of them. Also, if the Credit notes were raised. The party couldnt have claimed double credit as it was reversed later that year.

Also, can you suggest any Case law or Guidance note/circular to that effect.

[Padmanathan KV]

There is neither any provision in law which mandates such declaration nor is it a standard practice. But some GST officers insist on such declarations out of abundant caution.

In case such declarations are asked, you may politely refuse it. To my knowledge there are no case laws/ circulars on this issue under GST law as of now.

[Ganeshan Kalyani]

GST Officer want to confirm whether the customer has claimed credit only once. You may request the officer for the submission of confirmation from some customers whose credit claim amount is huge.

[Amit Agrawal]

For duplicate entries in Form GSTR-1 so filed, tax-invoice number & date got changed or same are as the original invoice?

[Shilpi Jain]

There should not be any interest levied on this. It is only an error and a plea can be taken that these errors have happened during initial phases on GST.

Also without any supply there cannot be any levy of GST.

[Shilpi Jain]

Also one more thing which you can do is make an intimation to the department regarding what has happened.

AI Summary

GST reporting errors: duplicate return entries reversed by credit notes do not alone create tax liability if no supply occurred.
Duplicate B2B invoices were filed in a periodic outward supplies return and later reversed by credit notes in a subsequent period, but the proper remedy is amendment of the original return rather than credit notes. If no underlying supply or tax liability exists, tax and interest should not attach merely because of duplication; contemporaneous source documents can establish a clerical mistake. Some officers may request recipient confirmations that input credit was claimed only once, though no law mandates such declarations.