I have a query. My Client filed GSTR 3B for Nov'20 having sale Rs.100000 gross with Rs.9000 in cgst and sgst each.
But later it was discovered that the sale was actually of IGST.
Now, With DRC-03, will he have to pay full igst of Rs.18000 with Interest
Or
He can adjust CGST of Rs.9000 with IGST and pay Rs.9000 balance as IGST (under the scheme of setting off/netting of itc) ( also we will add 3 months Intetest). If yes, then how ??
Secondly, will the party get full credit of ITC in their GSTR 2A if We use the scheme of netting.
11 July 2024
In the scenario described, where the GSTR-3B was initially filed with CGST and SGST instead of IGST, and now it's discovered that the sale was actually IGST, here’s how you can address the situation and the implications:
### 1. Adjusting CGST and SGST Paid:
- **Correction Using DRC-03**: Since the error involves payment under the wrong tax head (CGST and SGST instead of IGST), you can rectify this using Form DRC-03. This form is used for making payment towards voluntary tax liabilities or to adjust tax paid on account of erroneous details furnished in returns.
- **Payment with Interest**: When correcting such errors, typically, you would need to pay the correct tax amount (in this case, IGST of Rs. 18,000) along with interest. The interest is calculated from the due date of filing the original return (GSTR-3B for Nov'20) until the date of payment.
### 2. Set Off of CGST and SGST Against IGST:
- **Adjustment Against IGST Liability**: According to GST rules, you can adjust CGST and SGST already paid against the IGST liability. This adjustment can be made using Form DRC-03 while paying the correct IGST amount.
- **Procedure**: - File Form DRC-03 and select the option to utilize the amount available in electronic cash ledger (which includes CGST and SGST paid). - Enter the correct IGST liability (Rs. 18,000) and the balance payable (if any after adjustment) will be calculated automatically. - Pay the balance IGST amount through the common portal.
### 3. ITC Credit in GSTR-2A:
- **ITC Reconciliation**: When you correct the payment through DRC-03 and adjust CGST and SGST against IGST liability, the ITC claimed in GSTR-3B for CGST and SGST will be reversed.
- **Impact on GSTR-2A**: The corrected details will reflect in subsequent GSTR-2A of your client. The ITC available in GSTR-2A will show the adjustments accordingly, reflecting the correct IGST payment made.
### Conclusion:
- **Payment with DRC-03**: Use Form DRC-03 to correct the tax payment made incorrectly under CGST and SGST instead of IGST. - **Interest Calculation**: Pay IGST of Rs. 18,000 along with interest calculated from the original due date of filing GSTR-3B till the date of payment. - **ITC Adjustment**: Adjust CGST and SGST paid against IGST liability while filing DRC-03. The adjustments will reflect in subsequent returns and GSTR-2A.
It’s advisable to proceed with the correction promptly to avoid further interest accruals and ensure compliance with GST regulations. If you need further assistance or clarification, consider consulting with a GST expert or a Chartered Accountant familiar with GST procedures.
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