Adjustment of IGST Credit Note when no output tax liability of IGST

[Prakash and Thiagarajan]

Dear Members,

I have a scenario wherein Credit Note for an invoice of 22-23 was issued during April 2023 and shown in GSTR-1. This pertains to IGST transaction. However, since there is no IGST output tax liability to cover the said amount till date, I am unable to adjust it in GSTR-3B. In my view, once the amount in shown in GSTR-1, delay in adjustment beyond Nov 23 should also be legally possible without restriction. Any other view or suggestion to handle this situation.

Regards,

Ganesh

AI Summary

Refund of unutilised IGST credit available where output liability is absent, claimable as excess payment or under refund rules.
Where a credit note reduces IGST on outward supplies but no IGST output liability exists to absorb the reduction, the supplier cannot adjust that IGST in GSTR-3B despite disclosing the credit note in GSTR-1. The supplier may instead pursue refund of unutilised IGST credit (including via excess payment routes) or consider export-linked refund mechanisms such as supplies under LUT, subject to statutory refund conditions and exclusions.