TaxTMI 
TaxTMI 
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
Rule 96A of CGST Rules, 2017
24 Dec 2024 
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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. (AI Summary)
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. (AI Summary)