GST--Credit note (non Acceptance by the buyer)

[DK AGGARWAL]

Dear Expert

What will be the concequences if C?N not accepted by the party in IMS. As per exeple below

ABC company supply good  Ex Delhi charging IGST @18% to  party XYZ at Kanpur UP., but the party XYZ do not accept the goods being wrong supply and do not take delivery from  transport. The goods are returned to  Delhi to ABC. 

IN the meantime the GST-1 is filed and a  Credit Note is issed to adjust the wrong supply as Invice cannot be cancelled being more than 24 hours and EWay bill issued.

The Buyer XYZ do not accept the Invoice and Credit Note in IMS system.  But as per system of  IMS if the credit note is not accepted by the party it will increase our liability in 3B to pay tax in system.

Please guide how to adjust the tax payable of C/N.

Regards

D Aggarwal

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

With the advent of GST, suppliers are obligated to be in continuous contact and work in coordination with their customers.  This will similarly apply vice versa also.

Coming to the issue at hand, your customer may keep the invoice pending but they cannot keep the credit note in abeyance.  Either they have to accept or reject the credit note in the same month of its raising.  If the credit note is acceptance, your day is made, else, you will have no option but to manually correct your GSTR-3B returns and then explain the circumstances during audit/ scrutiny.

You may also choose to raise a complaint (probably at the cost of losing a customer!) at the GST portal by navigating to "Report Issue", by attaching both the original supply invoice and related credit note issued therein.  Another alternative, will be to shoot an email to the department at [email protected], lucidly explaining your predicament.  Thanks

[DK AGGARWAL]

Thanks Sir for your reply and guidance

[Shilpi Jain]

you can search for "Handling of Inadvertently Rejected records on IMS – GSTN "

You can add the CN in amendment table in next month and inform recipeint to accept the invoice and cn

Else amend the  invoice also to zero supply of which  has not been accepted by customer.

 

 

[NYAYASETU LEGAL ASSOCIATES LLP]

Considering the latest changes on IMS portal. Just want to add on further to as suggested by Shilpi Jain- Ask the recipient to accept amended credit note with NO ITC Reversal option.

AI Summary

Credit note acceptance: unaccepted CNs can increase GSTR-3B liability; seek amendment, invoice nilification, or manual correction and notification. When a recipient does not accept a credit note on IMS, the supplier's system liability may still show increased tax payable in GSTR-3B. Practical remedies include securing recipient acceptance of an amended CN with a No ITC Reversal option, adding the CN in the IMS amendment table in the next month, amending the invoice to nil supply, or manually correcting GSTR-3B and documenting explanations; escalation via the GST portal or departmental helpdesk is also suggested.