Question

Client got advance money for machinery manufacturing in 2017-18 before Nov-17,,We already paid Tax on Advance money which we received...But by mistake of accountant we paid tax again on full bill amount. We realised it in July-18 at that time we adjusted that amount from actual sales in 3b Return. so We shows less output in 3b than GSTR1.. Is this right way to adjustment? if answer is no then pls give any other option for it.

Answer

Facts of the case: The case relates to period prior to Nov-17(i.e when tax was payable on advance money received). Tax was paid when advance money was received because TOS was the date of receipt of payment. Later on tax was deposited again on full billed amount. Adjustment was made in GSTR-3B only not GSTR-1.

Law Applicable:
GSTR-01 Entry no. 11(B), shown below, depicts the column where advance money received should have been adjusted.
Consolidated Statement of Advances Received/Advance adjusted in the current tax period/ Amendments of information furnished in earlier tax period
 

Interpretation: The correct way of this should be making an entry in column 11(B) of GSTR-1 for the month in which invoice was issued against advances.
However, adjustment was already made in GSTR-3B but not in GSTR-1.

Conclusion: As per order no. 2/2018 of CGST the rectification of error/omission in GSTR-1 can be done till the due date of filling of return under section 37 for the month of March 2019.
Therefore it is advised hereby to rectify the same in GSTR-1 before the due date.
Additionally the advances shall also be adjusted in Entry F. of Part-II of Annual return GSTR-9 filled under section 44. (Reply dt.29/03/2019)