QUESTION
Queries on GSTR 9: Outward supply

1. A case of application of lower (18%) than applicable tax rate (28%) is identified in Jun 2019 in invoice of FY 17-18. Now, it is proposed to claim the differential from customer by issuing a Debit Note for the invoice of FY 17-18. GSTN portal allows to issue such note. Please inform

1.1. Whether above transaction is permissible in law?
1.2. If yes to above, whether recipient would be allowed ITC in FY 19-20?
1.3. Whether any concern with respect to GSTR 9 of FY 17-18? Can audit show it as reconciliation item that tax paid in FY 19-20 (even beyond Mar 19)?

2. Place of Supply (POS) related several errors are identified in outward supply.
2.1. Should we report, prepare DRC-03 & claim refund, ITEM-WISE, or it may be netted off?
2.2. In case we have POS errors in ITC also, can we make net payment & claim net refund?
 

Above scenarios may be explained by following example Identified rectifications Correct POS IGST CGST SGST
Invoice 1: IGST payable A Delhi 1000 -500 -500
Invoice 2: IGST payable B Haryana 1000 -500 -500
Invoice 3: C/S GST payable C Local -3000 1500 1500
Net Rectification AtoC -1000 500 500
 

Q2.1 DRC-03 payable (With ref to POS) A Delhi 1000 NA NA
Q2.1 DRC-03 payable (With ref to POS) B Haryana 1000 NA NA
Q2.1 DRC-03 payable (With ref to POS) C Local NA 1500 1500
Q2.1 Refund claim (W/o ref to POS) A,B&C = D -3000 -1000 -1000
 

Q2.2 Now, if C/SGST ITC is availed instead of IGST E Delhi 900 -450 -450
Q2.2 Can we adjust DRC-03 as >>>> A-E Delhi 100 no change no change
Q2.2 Can we adjust Refund as >>>> D-E no change -550 -550

Queries on GSTR 9: ITC
3. 6A - Treatment of deviations from books and impact on admissible ITC
3.1. GSTR 3B - 4B items were netted off from 4A(5) - Certain ‘reversals’, e.g. TRAN-1 reversal on account of errors, were reflected in GSTR 3B by way of reduction from “All other ITC” instead of “ITC reversed”.
3.1.1. Please advise treatment w.r.t. 6B, 7F & 7H of GSTR 9.
3.1.2. Please suggest possible resolution in case the department takes a view that ‘positive’ difference in 6J implies availment of additional ITC through GSTR 9, which is not permitted.
 

Queries on GSTR 9: Table 10 to 16 issues:
4. Note dated 01-04-2018, whether to be reported in GSTR 9 of 2017-18? Please clarify by answering following cases. It appears that only errors/ omissions/ adjustments need to be reported in GSTR 9 of FY17-18 and no new transaction may be reported.
Case# Supply dtd 01Sep17 Reason for Note issue Details of Note GSTR-9 table

1 ?1000 @12% Correct tax rate is 18% DN dtd 01-04-18 (Taxable Value = NIL) 4 or 10 or in R9 of 18-19? 
2 ?1000 @18% Upward rate revision by ?500 DN dtd 01-04-18 4 or 10 or in R9 of 18-19? 
3 ?1000 @18% Upward rate revision by ?500 DN dtd 31-03-18 but reported in 3B of Apr18 10? 

5. Table 14: What is significance of “Tax Payable” and “Tax paid”? Can reportable figures be different in any of the situation?

6. Table 16B: Whether applicable in case material sent on job work prior to 01Jul2017 (Excise regime) returns after Dec 2017?

7. DRC-03 - payment issues: What is the best way to determine POS in DRC-03 in case IGST becomes payable by way of DRC-03?

Queries on GSTR 9C
a. Scope of audit/ certification under GST? Is it reasonable to assume that CA has to examine legality of each of the transactions over and above arithmetical accuracy even when the GST Department would audit the taxpayer. If yes, the compliance cost of taxpayer would increase significantly!
b. Turnover: As per prevailing accounting practices, discounts are accounted for either as ‘deduction from sales’ or ‘as expense under head like sales promotion expenses’. How to determine turnover in above scenarios for purpose of GST audit?
c. Services provided by the Govt. fall under RCM category in specified cases. Whether RCM applicable on factory licence, ROC Fees, Licence from Drugs and Cosmetics controller, etc? How and where to report non-compliance, if any- Whether to be reported under part V of GSTR 9C or in Sl No. 4 of report?
d. Interest payable but not paid - Whether to be reported under part V of GSTR 9C or in Sl No. 4 of report?
e. Independence of auditor: GST Auditor has to not only give observations/ qualifications like other statutory or tax auditor but also make recommendation for payment of tax as well as interest or penalty in cases of non-reconciliations. This way, a GST auditor may put immediately financial burden on the taxpayer, and thus has to be truly independent. Given the situations, where quotation is sought from auditor for the assignment, it may be difficult to ensure highest standards of independence. Comments, if any, of the learned speaker are requested.

ANSWER 
 1.1 Yes, because as per Section 34 there is no time limit specified for issuing of Debit note.
1.2 No, ITC cannot be availed as the last date for availment of pending ITC for the FY 2017-18 (31st March, 2019) has passed
1.3 For such transaction, you should show in column 4 and 9 of GSTR 9 and the payment should be made through DRC-03
2.1 As per Section 77, net off is permissible.
2.2 In case you have POS related issues, the question of Net Payment/Net ITC does not arise. In such a case as per section 54(3) refund cannot be claimed. Also, reversal of ITC should be done. As far as claiming of ITC is concerned, the same cannot be claimed now as the last date of claiming ITC has passed and thus ITC has lapsed. However, the above question is subject to litigation.
Reply to further queries is in process.

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