I have been registered uder composition. I have unknowingly made Inter State Supply in FY 2019-20 & FY 2020-21. I have received a notice u/s 74 regarding the same, directing me to pay tax @18? on total turnover from those 2 financial years.
Is there any way to reduce my liability?
Can I adjust the liabilty with ITC on purchases made in those two financial years?
Are there any case laws regarding the same?
Whether Section 74 demand on composition taxpayer for inadvertent inter-state supplies can be reduced or offset by ITC A registered composition taxpayer reports inadvertent inter-state supplies in two financial years and received a notice under Section 74 seeking payment of tax at standard rate on total turnover for those years. The taxpayer asks whether the liability can be reduced, whether input tax credit from purchases in those years can be adjusted against the demand, and whether any case law supports relief. The core issues are applicability of composition restrictions to inter-state supplies, assessment/deterrmination procedure under Section 74, eligibility to claim or adjust ITC against assessed demand, and potential precedents on relief or reclassification of supplies. (AI Summary)
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