Issue with IMP IGST claimed in another state for stock transfer to Amazon FBA warehouse

This query is : Resolved

Abhinav Gupta (Querist)
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19 May 2024 Issue pertains to FY 19-20 where client has two GST registration one in Delhi another one in Karnataka, now goods sent to FBA warehouse in Karnataka state but this hasn't be shown on GST portal as interstate sale movement, and IMP igst input is directly claimed in Karnataka state, annual return has already been filed without showing this interstate stock movement.

Now notice has been received from Karnataka GST stating no input available in 2A for that FY and demand has been raised. Now what can be done, how can it be resolved now. Any help would be appreciated

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Resolving the issue regarding the interstate stock movement and the subsequent demand raised by the Karnataka GST department requires a structured approach. Here’s a step-by-step guide on what can be done to address this situation:

### 1. Review the Notice and Demand:

- **Understand the Issue:** Carefully review the notice from the Karnataka GST department to understand the specific reason for the demand. It likely pertains to the mismatch between the IGST input claimed and the absence of corresponding interstate sale movement on the GST portal.

### 2. Reconcile GST Returns and Records:

- **Identify the Transaction:** Verify the details of the interstate stock movement from Delhi to the FBA warehouse in Karnataka during FY 19-20. Ensure all relevant documentation such as invoices, delivery challans, and transport documents are available and reconcile them with the GST returns filed for that period.

- **Rectify Errors:** If the interstate sale movement was not reported correctly in the GST returns (GSTR-1 and GSTR-3B), rectify this error immediately.

### 3. File a Revised Return (if applicable):

- **Revised GSTR-1 and GSTR-3B:** If the interstate movement of goods to Karnataka was not reported in the original GST returns for FY 19-20, consider filing a revised GSTR-1 to include these transactions. Correspondingly, revise GSTR-3B to reflect the correct input tax credit (ITC) claim.

### 4. Approach the GST Authorities:

- **Submit Clarifications:** Prepare a response to the notice explaining the situation clearly. Provide supporting documents to demonstrate the interstate movement of goods from Delhi to Karnataka and the legitimate claim of IGST input in Karnataka.

- **Seek Rectification:** Request the Karnataka GST department to rectify the demand based on the revised GST returns and the correct reporting of interstate transactions.

### 5. Documentation and Compliance:

- **Maintain Records:** Ensure all documents related to the interstate movement, including proof of delivery, transportation, and GST filings, are maintained properly for future reference and audits.

### Consult with a Tax Professional:

- **Expert Advice:** It’s advisable to seek guidance from a tax consultant or a chartered accountant experienced in GST matters. They can assist in preparing the response to the notice, filing revised returns, and communicating with the GST authorities effectively.

### 7. Follow Up and Resolution:

- **Monitor Progress:** Regularly follow up with the Karnataka GST department regarding the status of your response and rectification request.

- **Compliance Going Forward:** Implement measures to ensure timely and accurate reporting of interstate transactions in future GST returns to avoid similar issues.

### Conclusion:

Resolving the notice and demand from the Karnataka GST department involves correcting the reporting of interstate stock movements in FY 19-20 through revised GST returns and providing adequate documentation to support your case. Engaging with tax professionals can streamline this process and ensure compliance with GST regulations while resolving the issue effectively.