Q. 224 My client is a government contractor. he has undertaken some of the government contracts which are covered under 12% gst rate ( repairs/renovation to building etc) and are of the period before march 2022. now while uploading gstr1 of august 2022 i have to cover these bills. the hsn code is 9954. however now hsn code is required of minimum 6 digit and hence the code 9954 is not accepted on the portal. please advise in this regard.

Ans. In respect of the advisory issued, taxpayers with AATO of more than 5 crore would be required to mandatorily report 6- digit of HSN code while filling table 12 of the GSTR-1. This has come from 1st August,2022. Therefore, in the above-mentioned case you are required to furnish 6 digits of HSN code in GSTR-1. 

Q. 223 Due to technical error, the assessee has collected excess tax from few of the customer and also collected short from another set of few customers. These transaction includes both B2B and B2C customers. How to treat this in GST ?

Ans. In case of excess collection of tax, credit note may be issued for B2B supplies under GST law. In case of short collection of tax, debit note may be issued for B2B supplies under GST law. For B2C supplies, in case of excess collection of tax, the collected tax is required to be paid to the government. This is to be made in order to avoid consequences of section 76 of the CGST Act. And in case of short collection of tax, the taxable value is to be recomputed inclusive of tax amount.

Q. 222 ABC & XYZ are running Chit Fund Business”. Example: Now XYZ generated invoice ABC as below calculation. Taxable (Bid) amount: 10,00,000. GST @ 12% : 1,20,000. Invoice value: 11,20,000. Since both are running Chit fund business, can ABC claim input tax credit of Rs. 1,20,000/- paid on bid amount to XYZ. Kindly do the needful ?

Ans. Since both the companies are chit fund companies, therefore ITC can be claimed as a B2B transaction. Chit fund companies fall under the definition of miscellaneous NBFCs. Hence, relevant ITC provisions applicable to NBFC would be applicable to chit fund companies as well. In the above case, there are two ways to claim ITC under GST law which are as follows :- Section 17(2), claim eligible ITC after applying rule 42 and rule 42 of the CGST rules or, Section 17(4) read with rule 38 of the CGST rules, limit ITC availment to 50% of ITC and the remaining ITC shall lapse.