Turnover exceeds GSTR3B Returns Turnover

[Shambhavi Nayak]

While preparing the profit and loss due to one wrong entry of accountant the taxable turnover exceeded the GSTR-3B Turnover.

This was a clerical error while passing entry of Purchase return Invoice value he passed sales return entry and hence the effect increased the turnover. In the transaction no tax involved.

The seller party has uploaded credit note in GSTR site and the Tax has been reversed in GSTR 3B

[KASTURI SETHI]

What is your specific query ?

[Shambhavi Nayak]

Observation No.4:

Verification of P & L Account and Bo-web, comparison of outward supply turnover declared in P & L Account and GSTR-3B shows the short payment of tax in GSTR-3B compared to P & L Account. The details are as under:

 

Tax Period	Taxable value declared in P&L Account	Taxable value declared in GSTR-3B	Differential Value
2021-22	96,62,49,772	96,23,12,199	39,37,573

 

 

[Shambhavi Nayak]

Reply:

As per 9 & 9C turnover declared is shown in the below mention table

B2C	3,66,87,293.57/-
B2B	93,18,43,481.90/-
TOTAL	96,85,30,775.47/-
Credit Note	28,22,281.10/-
Debit Note	1194/-
TOTAL	96,57,09,688.37/-
Less : Super Tiles & Sanitary ware	21,44,527/-
GARND TOTAL	96,35,65,161.37/-
Super Steels Turn over as per GSTR 9	96,57,09,688.37/-
Difference	21,44,527/-

During the month of November 2021 M/s Sahanu Sponge & Power Private Limited GSTIN 30AAJCS0723L1ZJ ON 02.11.2021 sent a load of materials as mentioned below.

Invoice No	Date	Qty	Taxable value	IGST	Invoice Value
1853	02-11-2021	34.970 MT	18,63,901	3,35,502	21,99,403

Due to quality and delay in supply we rejected the load and informed them to take back the consignment. They agreed and issued an credit note 97 dated 03-11-2021 for the said value of Rs.21,99,403 and uploaded the same in GSTIN portal for the month of November 2021 and the Tax amount was reduced in GSTR 3B of ours for the month of November 2021.Later for accounting purpose our Accountant passed a Debit Note entry for entire tax invoice value in our books by mistake he posted the entry in sales return instead of Purchase return which ended up with additional turnover of Rs. 21,99,403 in our books of account and while Tax Audit also it was un noticed and due to which turnover in Books & Profit & loss amount of Rs. 21,99,403 was found.

[Pinnacle Tax Advisor]

Your query is not clear. If your supplier has issued a credit note and declared it in their return, it should not affect your outward liability. Furthermore, if your accountant has mistakenly recorded a sales return in your books of account, please explain how this resulted in additional turnover being reflected. Kindly provide a correct explanation of the issue so that an expert opinion can be given.

[Shambhavi Nayak]

Sir,

In our case Debit note is issued in suppliers name which doest appear in GST Returns unless we manual feed the transaction.

For sales Return we issue credit note and the e-invoice gets generated and directly it appears in GSTR 1

For Purchase Return the entry should have been passed in Purchase account, but the accountant passed entry in Sales Return and the amount got added in Turnover.

if the correct entry was been passed the purchase value would be changed.

[Shambhavi Nayak]

The entry passed gives debit effect in sales Return ledger

Total Sales Return Value for 2021-22 Rs 2883971.11

Debit note entry passed for 2021-22 Rs.2199403.00

Net sales Return Value Rs.684574.11

This effect makes turnover excess than GSTR 3B

[Shilpi Jain]

If you have erred in your books pls correct the entries.

Error cannot lead to tax demand.

Prove its an error and no need to pay tax.

[KASTURI SETHI]

Have you received Show Cause Notice from the department or you are pro-active ?

[KASTURI SETHI]

There are case laws on the issue of clerical error in favour of the tax payers, Easily available on various websites or google. Here it is pertinent to know what is a clerical error.

A clerical error is an error occasioned by an accidental slip. It is a mistake in writing or typing. It is an error apparent on the face of record and does not depend for its discovery on argument or disputation.-------Supreme Court the case of Sooraj Devi Vs. Pyare Lal - 1981 (1) TMI 280 - Supreme Court.

In view of bona fide mistake, especially, when no revenue loss is involved, nothing to worry at all. In order to avoid SCN, you can inform the jurisdictional GST Range Officer in writing about the clerical error.

AI Summary

Clerical error in tax records: misposted sales return inflated reported turnover; correct books and notify tax officer promptly.
A bookkeeping misposting increased recorded turnover beyond GSTR 3B: the supplier issued and uploaded a credit note reversing the tax in GSTR 3B, but the taxpayer's accountant mistakenly entered the amount as a sales return instead of a purchase return, causing excess turnover in Profit & Loss. No tax was involved in the underlying return. Recommended steps are to correct the accounting entries, document the bona fide clerical error, and notify the jurisdictional GST officer to avoid a show cause notice, and to reconcile books with GSTR 3B and supplier documents during audits.