Credit note issued but not amended in GSTR1 return accordingly

[Sudhir Kumar]

One client has issued credit note but not shown the same in GSTR-1 return under section 34. They have shown the credit note in annual return GSTR-9. Department has issued the demand denying that credit note has not been shown in R1 during the period under questions. What the step the client should take.

 

AI Summary

Client's Credit Note Error in GSTR-1 Leads to Tax Demand; Books of Accounts Key for Resolution Under Section 34. A client issued a credit note but failed to reflect it in the GSTR-1 return under section 34, instead showing it in the annual GSTR-9 return. The tax department issued a demand due to this omission. Experts advised that the client should rely on their books of accounts as the primary record, providing evidence of the credit note and explaining its absence in GSTR-1. They should reconcile the payment in GSTR-3B with the sales register. Additionally, it's crucial to ensure that the recipient hasn't claimed Input Tax Credit if the credit note was for a discount.