Question

Q. RCM liability paid under IGST (wrong head), Input for the same taken under CGST & SGST (correct head). Received SCN on this issue. Please share your views.

Answer 1

The mistake of paying RCM liability under IGST instead of CGST and SGST can be rectified by following the prescribed procedure under the GST law. The primary concern here is to ensure that the tax paid under the wrong head is correctly adjusted without losing the input tax credit (ITC) entitlement.

Adjustment in Electronic Cash Ledger: You may need to adjust your electronic cash ledger to reflect the payment under the correct heads (CGST and SGST). This might involve claiming a refund for the IGST paid erroneously and then using the refunded amount to pay the CGST and SGST liabilities correctly.

Input Tax Credit (ITC) Adjustment: Since you've taken the input credit under CGST and SGST, which is the correct procedure, ensure that your ITC claim aligns with the actual tax payments made. If the tax payment is rectified to reflect payment under CGST and SGST, your ITC claim should be in order.

Responding to the SCN: It's crucial to respond to the Show Cause Notice within the stipulated time, explaining the mistake and the steps taken for rectification. Provide detailed calculations and documentary evidence (if any) to support your explanation and rectification measures.

Regards, CA. Praveen Sharma

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