4 BIG COMMON Mistakes in GSTR- 3B
3. ITC SIDE –
3.1. If you have CLAIMED wrong ITC of “FMCG PE“ ” FOOD & BEVERAGES | MOTOR CAR IF less THAN 13 PERSONS | construction | Goods Destroyed/lost | Personal Expenses | Exempted Goods Manufactured then you need to reverse it. People Forget to reverse
IF they have claimed any ITC on any such blocked
3.2. Sale return shown as Purchase & Thereby claiming wrongly ITC on it – You cannot show this in GSTR 3b as “INWARD”. You have to reduce sales in GSTR 3B .. Discussed this in 4th Point
4 . CREDIT NOTE / DEBIT NOTE
Biggest mistake , People are making that For Sale side credit note ( i.e sale side reduction/ sales return ) , You have claimed it in Purchase & thereby claiming ITC. Instead of Reducing Sale side liability. Mind well , You are doing wrong .
What is right approach ?? In GST , Any sale side reduction , Seller should issue Credit Note & he should reduce his Outward Tax
LET’S make it clear that Only SUPPLIER ( I. E SELLER ) has to issue CREDIT NOTE / DEBIT NOTE when sales amount gets changed or sale return
Credit note or Debit Note
GSTR-1 which you send , We are finding lot many mistakes in GSTR-1 particularly for Credit Note – Debit Note . Please feel free to ask me anytime to learn about CN-DN . Hereby , I am writing detailed explanation once again for Credit note / Debit Note .
Firstly , keep in mind that only seller need to make Credit Note – debit note (& never Purchaser).Both Debit Note or Credit note need to be prepared only by Supplier (seller). (whenever there change (+/-) in Sales invoice).
What is Debit Note?
A debit note in GST, is a document issued by the supplier in the following cases:
· +Increase in Taxable Value -When a supplier requires to increase the taxable value of a supply, he/she has to issue debit note to the recipient.
· +Increase in GST charged in invoice – When a supplier requires to increase the rate or value of GST charged in an invoice, he/she has to issue debit note to the recipient.
The issuance of a debit note or a supplementary invoice creates additional tax liability. The treatment of a debit note or a supplementary invoice would be identical to the treatment of a tax invoice as far as returns and payment are concerned.
What is Credit Note?
A credit note in GST, is a document issued by the supplier in the following cases:
· -Supplies are returned or found to be deficient by the recipient – When goods supplied are returned by the recipient or goods/services supplied are found to be deficient by the recipient, the supplier should issue a Credit Note. The credit note serves the purpose of reducing the value of the original supply.
· -Decrease in taxable value – When a supplier requires to decrease the taxable value of a supply, he/she has to issue a credit note to the recipient.
· -Decrease in GST charged in invoice – When a supplier requires to decrease the rate or value of GST charged in an invoice, he/she has to issue a credit note to the recipient.
You have to think Other way round , If you have made Purchases and thereafter any Price revision or Purchase Goods return happened.
FOR PURCHASE DECREASE OR GOODS RETURNED BY YOU – REDUCE ITC in GSTR 3B I.E INWARD SIDE EFFECT….. ( NO EFFECT IN GSTR 1)
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