Liability as per 2A to be adjusted
This query is : Resolved
25 April 2020
Legal Heir continued business of expired mother with new GST No. ITC was transferred through Form ITC-02. The GST No. of deceased person was not applied for cancellation by mistake. He returned some purchases which were made by the deceased person. The supplier issued & filed credit note in deceased person GST no. Now GSTR2A of deceased person is showing entry of goods return while the ITC is available with the Legal Heir GST No. How should now the Legal Heir adjust the ITC available in his new GST No. with the Liability of GST in 2A of the deceased person.
26 April 2020
Ask your suppliers to correct the mistakes in their GSTR-1 so that ITC gets reflected in new GSTIN
30 April 2020
But can a supplier issue Invoice in a GST No. & credit note in different GST No. for the same invoice. Shall the portal accept INVOICE in one GST No. & the CREDIT NOTE in another GST No.for same invoice ?
02 August 2024
In the scenario you described, there are several aspects to address regarding the adjustment of Input Tax Credit (ITC) and handling of GST liabilities for a business continued by the legal heir of a deceased person. Here’s a detailed explanation and steps to resolve the issues:
### **1. Handling ITC and GST Liabilities**
**a. ITC Adjustment and Liability Reconciliation:**
1. **GSTR-2A and ITC Transfer:**
- Since the legal heir has transferred ITC through Form ITC-02 from the deceased person's GST number to the new GST number, the ITC should be correctly reflected in the new GST number's records.
2. **Goods Return and Credit Notes:**
- The supplier issued a credit note in the GST number of the deceased person, which means the GST records of the deceased person are affected.
3. **Reconciliation Steps:**
- **Confirm ITC Transfer:** Verify that the ITC transfer via Form ITC-02 was correctly processed and reflected in the new GST number.
- **Adjust the Deceased Person's GST Records:** Since the deceased person’s GST number was not canceled, the credit note issued will impact the ITC available in the deceased person's GST records.
- **Adjust ITC in New GST Number:** Adjust the ITC in the new GST number based on the credit note issued under the deceased person’s GST number. This means you may need to adjust the ITC in the new GST number if the credit note has reduced the ITC balance of the deceased person's GST number.
**b. Handling GST Invoices and Credit Notes:**
1. **Issuing Credit Notes:**
- **Same GST Number:** Generally, credit notes should be issued against the same GST number under which the original invoice was issued. This is because GST records and ITC adjustments are linked to the GST number of the supplier and recipient.
- **Different GST Numbers:** Issuing a credit note in a different GST number from the invoice is not standard practice and might not be accepted by the GST portal. The system expects that credit notes are issued against the same GST number as the original invoice for correct ITC adjustments.
2. **Portal Acceptance:**
- The GST portal generally does not accept invoices and credit notes under different GST numbers for the same transaction. Both the invoice and the credit note need to be under the same GST number to ensure proper reconciliation and ITC adjustments.
### **2. Steps to Resolve the Issues**
1. **Cancel the Deceased Person's GST Number:**
- Ensure that the GST number of the deceased person is canceled to avoid further confusion and errors in the future.
2. **Rectify ITC and Credit Note Issues:**
- **Coordinate with Supplier:** If possible, request the supplier to issue a credit note under the new GST number if they have mistakenly issued it under the deceased person’s GST number. This will align with proper GST practices.
- **Adjust ITC:** If the credit note cannot be corrected, adjust the ITC available in the new GST number accordingly. You may need to manually reconcile and document the adjustments.
3. **File Correct GST Returns:**
- Ensure that all adjustments and reconciliations are accurately reflected in the GST returns of both the deceased person’s and the new GST numbers.
4. **Consult GST Professional:**
- Given the complexity of this situation, consulting with a GST practitioner or tax advisor is advisable. They can provide guidance on reconciling ITC and addressing issues with GST compliance.
### **Summary**
- **ITC Adjustment:** Transfer ITC from the deceased person's GST number to the new GST number should be correctly reflected, and adjust the ITC accordingly.
- **Credit Note Issuance:** Credit notes should be issued under the same GST number as the original invoice. If issued under a different GST number, it may not be accepted by the GST portal.
- **Action Steps:** Cancel the deceased person's GST number, reconcile ITC, and adjust credit notes as needed. Consulting with a GST professional is recommended for accurate compliance.
Ensuring proper handling and adjustment of GST records and ITC will help maintain compliance and avoid issues with GST authorities.
### **1. Handling ITC and GST Liabilities**
**a. ITC Adjustment and Liability Reconciliation:**
1. **GSTR-2A and ITC Transfer:**
- Since the legal heir has transferred ITC through Form ITC-02 from the deceased person's GST number to the new GST number, the ITC should be correctly reflected in the new GST number's records.
2. **Goods Return and Credit Notes:**
- The supplier issued a credit note in the GST number of the deceased person, which means the GST records of the deceased person are affected.
3. **Reconciliation Steps:**
- **Confirm ITC Transfer:** Verify that the ITC transfer via Form ITC-02 was correctly processed and reflected in the new GST number.
- **Adjust the Deceased Person's GST Records:** Since the deceased person’s GST number was not canceled, the credit note issued will impact the ITC available in the deceased person's GST records.
- **Adjust ITC in New GST Number:** Adjust the ITC in the new GST number based on the credit note issued under the deceased person’s GST number. This means you may need to adjust the ITC in the new GST number if the credit note has reduced the ITC balance of the deceased person's GST number.
**b. Handling GST Invoices and Credit Notes:**
1. **Issuing Credit Notes:**
- **Same GST Number:** Generally, credit notes should be issued against the same GST number under which the original invoice was issued. This is because GST records and ITC adjustments are linked to the GST number of the supplier and recipient.
- **Different GST Numbers:** Issuing a credit note in a different GST number from the invoice is not standard practice and might not be accepted by the GST portal. The system expects that credit notes are issued against the same GST number as the original invoice for correct ITC adjustments.
2. **Portal Acceptance:**
- The GST portal generally does not accept invoices and credit notes under different GST numbers for the same transaction. Both the invoice and the credit note need to be under the same GST number to ensure proper reconciliation and ITC adjustments.
### **2. Steps to Resolve the Issues**
1. **Cancel the Deceased Person's GST Number:**
- Ensure that the GST number of the deceased person is canceled to avoid further confusion and errors in the future.
2. **Rectify ITC and Credit Note Issues:**
- **Coordinate with Supplier:** If possible, request the supplier to issue a credit note under the new GST number if they have mistakenly issued it under the deceased person’s GST number. This will align with proper GST practices.
- **Adjust ITC:** If the credit note cannot be corrected, adjust the ITC available in the new GST number accordingly. You may need to manually reconcile and document the adjustments.
3. **File Correct GST Returns:**
- Ensure that all adjustments and reconciliations are accurately reflected in the GST returns of both the deceased person’s and the new GST numbers.
4. **Consult GST Professional:**
- Given the complexity of this situation, consulting with a GST practitioner or tax advisor is advisable. They can provide guidance on reconciling ITC and addressing issues with GST compliance.
### **Summary**
- **ITC Adjustment:** Transfer ITC from the deceased person's GST number to the new GST number should be correctly reflected, and adjust the ITC accordingly.
- **Credit Note Issuance:** Credit notes should be issued under the same GST number as the original invoice. If issued under a different GST number, it may not be accepted by the GST portal.
- **Action Steps:** Cancel the deceased person's GST number, reconcile ITC, and adjust credit notes as needed. Consulting with a GST professional is recommended for accurate compliance.
Ensuring proper handling and adjustment of GST records and ITC will help maintain compliance and avoid issues with GST authorities.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- GST ON EXPORT COMMISSION
- Should I report my US salary for January, February, March in Schedule FA?
- RCM INVOICING FROM NOV-2024
- GST input on Mobile Handset
- Material and freight in same invoice
- TDS under section 194J inclusive of reimbursement of expenses
- TDS on Material and Labour in same invoice
- Should I be worried about and rectify reporting Jan,Feb ,March 2024 foreign salary in schedule FA?
- BUYING PROPERTY COULD NOT FILE 26QB
- Gst input for FY 23-24
- Regarding Waiver of Interest levied u/s 50 of PGST/CGST Act
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
Trending Online Classes
CAclubindia
