Excess payment made in 3B adjustment with short payment of GST in next financial year

[Sudhir Kumar]

Sir

One my client has received an SCN on short payment of GST in GSTR-3B in comparison to the liability declared in R1 for 2018-19.

However he replied to the department that he has paid excess liability in GSTR-3B in comparison to the liability declared in GSTR-1 for 2017- 18 and a partial amount of short paid liability declared in GSTR-3B in 2018-19 has been adjusted from excess payment made in 2017-18 in GSTR-3B while rest of the short paid liability of 2018-19 was adjusted with the excess liability paid in 2019-20, however the taxpayer agree to pay interest for delay payment of GST for 2018-19 in 2019-20.

Please suggest whether the client's adjustment is correct or the department 's action is correct? Can the client adjusted excess liability paid shown in GSTR-3B for previous year to the short paid liability shown in 3B for next financial year?

AI Summary

Client Challenges GST Shortfall Notice for 2018-19; Debates Adjustment Legality Under Section 39(9) and Circular No. 26/26/2017-GST. A client received a notice for short payment of GST in GSTR-3B for 2018-19 compared to GSTR-1. The client argued that excess payments made in GSTR-3B for 2017-18 and 2019-20 were used to adjust the shortfall. However, the department questioned the legality of these adjustments. Responses in the forum suggested referring to Section 39(9) of the CGST Act and Circular No. 26/26/2017-GST. Some advised that adjustments beyond prescribed time limits might not be valid, and suggested considering refund claims or consulting a local GST expert.