Rule 96A of CGST Rules, 2017

[Raam Srinivasan Swaminathan Kalpathi]

We had raised an Engineering Services Invoice for our overseas client on 10-Oct-24 under LUT. On 23-Oct-24 the client cancelled the Order on account of design deficiency and we issued a Credit Note to the said client for an equal amount. Both the e-invoice and credit note were reported in GSTR-1 in the same month. Will provisions of Rule 96A kick in? Do we still have to remit GST to the department with interest u/s. 50 in Form DRC-03? Thanks

AI Summary

No GST or Interest Due on Canceled Order Under LUT if Credit Note in GSTR-1, Says Rule 96A. An engineering services provider issued an invoice to an overseas client under a Letter of Undertaking (LUT) and later issued a credit note due to order cancellation. The provider queried whether Rule 96A of the CGST Rules, 2017, requires GST payment with interest. Responses clarified that if the credit note is reported in GSTR-1, GST payment isn't necessary. The discussion also covered the timing of credit notes relative to Rule 96A and Section 34(2) deadlines, concluding that no tax or interest is due if the export was under LUT and no refund was claimed.