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

[Manoj Thakur]

No, if you have filed credit note in table 9B of GSTR-1

[Raam Srinivasan Swaminathan Kalpathi]

I am delighted at the prompt reply.  Would the answer be the same in the following situations, viz.

Date of e-invoice - 01-Oct-23 and date of credit note 25-Oct-24

Date of e-invoice - 20-Nov-23 and date of credit note 15-Apr-24

Would like to comprehend the sanctity of Rule 96A(1)(b) (15 days from the end of one year) vs. Sec.34(2) deadline of 30th November.

Thanks in advance

[Ganeshan Kalyani]

Sir, credit note date in both the scenario is within the timeline prescribed u/s 34. Otherwise also tax was not paid on export since it being under LUT.

[Manoj Thakur]

Probably you're trying to choose between Rule 96A(1)(b) (15 days from the end of one year) vs. Sec.34(2) deadline of 30th November. Earlier one is the obvious choice.

[Shilpi Jain]

Once its an export under LUT, no requirement of payment of tax or interest, assuming no refund has been claimed.

AI Summary

Export under LUT: timely reported credit note in GSTR 1 prevents Rule 96A remittance and interest obligations. Proper reporting of a credit note against an export invoice issued under LUT in GSTR 1 (table 9B) neutralises the original supply for tax purposes; where no refund is claimed and the credit note is timely reported, there is no requirement to remit tax or interest. The earlier applicable temporal cutoff between the rule based deadline measured from the year end and the statutory credit note deadline governs recognition and reporting; non compliance with reporting timelines may trigger remittance and interest obligations.