• Remittance not recorded in GST or IT

We had received a foreign remittance of 18 Lakh in five parts during the FY 2019-2020 against export of SERVICES to our client in Europe. However our CA did not record the remittances. She put them under the head of TEMP and filed our ITR ln the same way. The amount is visible in our balance sheet under the Head TEMP, but we have not recorded the same in either GST or ITR.
What is the best way to rectify this? According to my CA we can call it as a clerical error and show the remittance recvd in 2019-20 in our books of FY 2020-2021 which we are yet to file for this year. 

Please advise.
Asked 8 days ago in Income Tax

In case of Income Tax return, if an income is undisclosed the same should be shown vide a revised return, however the due date for FY 2019-20 has passed and the same cannot be revised,

You may write to your AO highlighting the same and seek for manual revision.

The last option definitely is disclosing the same in pursuing ITR.

 

In case of GST Return, please note exports can be done without payment of GST provided LUT is filed and the details are disclosed in GSTR. In GST there is no concept if revision and therefore it has to be shown in current return only. You may show the said difference in current month GSTR filing and in 2019-20 annual filing, the difference would arise which can be shown as belated disclosure in t=GSTR in 21-22 and accordingly be reconciled.

However, please note that since no LUT was provided then, you run a risk of notice by GST dept. seeking tax payment on such exports, although your case in this matter would be defendable.

 

Lastly please note, your classifying as a clerical error will not provide you any relief, as any taxpayer whether bonafide or not always seeks the plea of clerical error only. The additional time limit is provided for rectifying such mistakes only, which in your case has expired.

 

Let's hope for the best.

 

Please advise in case of any further clarification.

 

Thanks & Regards,

CA Aditya Dhanuka.

Aditya Dhanuka
CA, Kolkata
31 Answers
2 Consultations

5.0 on 5.0

Hi

 

Since there is no option to revise the ITR for FY 2019-20, you may opt to pay the taxes while filing ITR for FY 20-21. At least, the due taxes would be paid. In case there is any query/ notice in the future, only interest should be levied.

Similarly, disclosure need to be done in GST returns. I assume that LUT was filed for claiming exports to be zero rated under GST.

Lakshita Bhandari
CA, Mumbai
5557 Answers
649 Consultations

5.0 on 5.0

- What journal entry was passed in 2019-20? 

- Now there is no scope of revision of ITR and GST. If you will show in FY 2020-21 then there would be a difference of turnover between audited financials and GST turnover of 2020-21.

- In case of GST if LUT was applied in 2019-20 before receiving foreign remittances and fulfillment of all other export without payment of taxes conditions then there is no tax implications otherwise pay tax alongwith interest.

- In respect to ITR, calculate tax on total income after clubbing Rs. 18 lacs for AY 2020-21. Deduct tax paid from total tax liability and pay difference tax alongwith interest. Select AY 2020-21 in challan and file rectification u/s 154.

 

For detailed discussion, you may consult telephonically.

Vivek Kumar Arora
CA, Delhi
4222 Answers
399 Consultations

5.0 on 5.0

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