Amendment of Invoices from B2B to B2C in GSTR-1

 INTRODUCTION

Nobody wants to pay higher amount of tax and for this he avails input tax credit, so that he can pay the net tax liability i.e., (Output tax liability – Input Tax credit availed).

But problem arise from here, wherein the person who is eligible to avail credit is not able to avail and the most common reason is wrong classification from seller’s side wherein the seller classify B2B transaction as B2C in GSTR-1.

WHAT IS GSTR-1?

GSTR-1 is a GST return which is to be filled on monthly or quarterly basis by every registered dealer which contains details regarding outward supplies/ sales made in the said month or quarter.

• Quarterly GSTR-1 – For taxpayer having sales up to INR 1.5 Crores in the preceding financial year or expected turnover in current financial year.
• Monthly GSTR-1 – For taxpayer having sales more than INR 1.5 Crores in the preceding financial year or expected turnover in current financial year.

WHAT IS B2B AND B2C CLASSIFICATION?

B2B – stands for Business to Business. Under B2B those sales transactions or invoices are classified which are made to registered persons i.e., person having GSTIN No.  In B2B both sales made to parties within the state as well as interstate are classified here.

B2C – stands for Business to Consumer which is further categorised in two heads:

B2C Large Invoices – To categorise under this head following conditions must be satisfied:

• Amount of sales should be more than Rs. 2.5 Lakh.
• Sales must be interstate sales only.
• Sales must be made to unregistered party.

B2C Others – Under this basically sales made to small consumers are categorised here.

• Sales made to the local unregistered person irrespective of the amount (i.e., if the sales amount is more or less than 2.5 Lakh is to be categorised here)
• Sales up to 2.5 Lakh (maximum) made to an interstate unregistered person is classified here. Sales more than 2.5 Lakh to an interstate unregistered person will come under B2C large invoices.

EMERGING PROBLEMS

This categorisation in B2B and B2C emerges problem for the purchaser in availing input tax credit. There are so many instances where B2B sales classified under B2C by seller in his GSTR-1 and because of this GSTR-1A of purchaser do not reflect input tax credit on the purchase made by him.

The problem of categorisation of B2B in B2C happens because of failure of the purchaser in providing GSTIN to seller or purchaser has not received GSTIN No. yet after applying for it. Previously there was no way to rectify it but now wrong classification of B2B in B2C made in returns of financial year 2017-2018 can be rectified up to 30th September, 2018.

LINE OF ACTION

If the purchaser is facing problem in availing input tax credit then he can approach his seller to make rectification in his September’2018 return for rectifying categorisation mistakes made in F.Y 2017-2018.

PROCESS

A seller can follow below mentioned steps:

1. Enter the GST portal and select GSTR-1 for September month.
2. Click on Table-10 i.e., Amendment of B2C (others).
3. After that, a window will display in which you need to enter a month which needs to be amended. Then click on “Amend Details”.
4. Now in next window, you have to reduce the taxable value and tax to the extent of the amount of rectification made.
5. After that, you need to add invoice details with purchaser’s GST No. in Table-1 B2B in addition to current month invoices.

Above we have mentioned the entire procedure how you can avail credit for F.Y. 2017- 2018 but still if you are facing issues in doing it then let us know. Reach us here or post your query on info@hubco.in