in the month of October 2022 Some goods break on the way. We have hold some payment and rest balance Clear to Supplier. supplier never demand to us send back break goods to me. we request to supplier send you account statement to match account balance. as per books of account of supplier our balance is NIL but as per our books of account supplier is balance Rs.10240 Cr. in October 2022 Supplier Cr.Rs.10240/- in his books of account mention narration adjustment of break Goods No document send to us. No show in his GSTR-1 .Can we issue debit note in March month Turnover is Rs.2 Crore book cover under audit 44AB.We not able to issue debit note to supplier in backdate ( Oct.22 ) 2023. so if we issue debit note in march 23 auditor will raise the issue because We already filed GSTR-3B march and ITC reversal not adjusted in march month . What to do in case guide to me. 1st Case (1) entry in 31 March 2023 Dr. XYZ Supplier Rs. 10240/- Cr. IGST input Rs.1562/- CR.Purchase account Rs.8678/-
Dr. IGST Input Rs.1562/- Cr. ITC to be reversed Rs.1562 ( Current Liability ) Its not adjusted in march.
in May month reversed the ITC in while filling In 3B
2nd Case Carried forward Balance Rs.10240/- in FY 2023-24 entry in Mary month
07 July 2024
It seems like you are dealing with a situation where there was a discrepancy in the goods received from your supplier due to breakage, and now you need to rectify the accounting and GST treatment for this issue. Here's a step-by-step guide on how to handle this:
### Case 1: Issuing Debit Note in March 2023
1. **Accounting Entries in March 2023:** - Debit XYZ Supplier account: Rs. 10,240 - Credit IGST Input (since the input tax credit was claimed earlier): Rs. 1,562 - Credit Purchase account: Rs. 8,678
This entry corrects the supplier's account balance and adjusts the purchases accordingly.
2. **GST Treatment:** - Since you've already filed GSTR-3B for March 2023 without adjusting ITC reversal, you need to reverse the ITC in the subsequent month (May 2023). - In May 2023, reverse the ITC previously claimed by: - Debiting IGST Input account: Rs. 1,562 - Crediting ITC Reversal account (current liability): Rs. 1,562
This adjustment will correct your GST records and comply with GST regulations.
### Case 2: Carrying Forward Balance to FY 2023-24
This entry reflects the correct balance due to the supplier.
2. **GST Treatment in May 2023:** - Reverse the ITC as mentioned in Case 1 for the amount of Rs. 1,562.
3. **Carry Forward to FY 2023-24:** - The remaining balance of Rs. 10,240 in the XYZ Supplier account will carry forward into the next financial year (FY 2023-24).
### Additional Notes:
- Ensure all entries are properly documented and supported by invoices or other relevant documents. - Inform your auditor about the adjustment and reversal of ITC in the subsequent month to maintain transparency and compliance. - Keep records of all communications with the supplier regarding the breakage and adjustment made.
By following these steps, you can rectify the accounting entries, adjust the GST treatment appropriately, and ensure compliance with audit requirements. If you have any specific questions or concerns, consulting with your auditor or a tax advisor would be advisable to tailor the solution to your company's specific circumstances.
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