OFFICE OF THE ASSISTANTCOMMISSIONER

केन्द्रीयजीएसटी(लेखापरीक्षा)सर्किल, मोहाली
CENTRAL GST (AUDIT) CIRCLE,MOHALI
कार्यालय: कमरासंख्या - 415, चतुर्थतल, सीआरबिल्डिंग, सेक्टर -17 C,
चंडीगढ़–160017
OFFICE: ROOM NO. 415, 4TH FLOOR,CR BUILDING,SECTOR-17C, CHANDIGARH-
160017
दूरभाष/Tel. 0172-2702371, 2702375; ईमेल/Email- [email protected]

DIN- Date-28-10-2024

FINAL AUDIT REPORT- 38/2024-25

M/s P. C. Jain Cement Store

1 Name of the Unit
LANDRAN ROAD, LANDRAN ROAD, KHARAR,
SAS Nagar, Punjab, 140301.

GSTIN-:03AAEFP3549D1ZL
2 Commissionerate/Division/Range Ludhiana/Sub Commissionerate Mohali/Mohali-
II/ Range- III
3 Service/Product Trading of Cement, White Cement falling under
manufacture/tariff Heading Chapter 25. The auditee is clearing all goods
under 28%.
4 Gist of Main Exemption -
Notification
5 Date of Audit 20.08.2024 & 21.08.2024
6 Period for which audit April, 2018 to March, 2023
Undertaken
7 Name of the Auditors (S/Sh.) Sh Suman, Superintendent,
Sh Devender Wadhwa, Inspector

Para No.1:- Non-payment of late fee amounting to Rs. 3500 /- (CGST Rs.1750/- & SGST
Rs.1750/-) in respect of GSTR-1 late filing for the period F.Y. 2019-20 to 2020-21:-
Issue involved:-

During the course of audit on scrutiny of the GST returns, it has come to notice that auditee
has filed late GSTR-1 returns of some months but failed to pay late fee for the relevant period
which was required to be deposited u/s Section 47 of CGST Act, 2017. Thus, auditee has
contravened the provisions of Section 47 of CGST Act, 2017. The details are as under:-

Late Fees
Year
CGST SGST Total
2019-20 800 800 1,600
2020-21 950 950 1,900
1,750 1,750 3,500

Accordingly, auditee was requested to deposit the interest amounting to Rs. 3,500/- (CGST
Rs.1,750/- & SGST Rs.1,750/-) under the provisions of Section 47 of CGST Act, 2017.
The auditee accepted the contention of the para and deposited the late fee vide
DRC No AD030924006433F, AD0309240064294 dated 26-09-2024. The Auditee
also submitted Annexure-X in this regard.

Para has been approved & Settled in the MCM dated 08.10.2024.

Para No.2:-Non-payment of late fee amounting to Rs. 11,450/- (CGST Rs.5,725/- &
SGST Rs.5,725/-)in respect of GSTR-3B late filing for the period FY 2020-21& 2021-22:
-

During the course of audit on scrutiny of the GST returns, it has come to notice
that auditee has file late GSTR-3B returns but failed to pay late fee for the
relevant period which was required to be deposited u/s Section 47 of CGST Act,
2017. Thus, auditee has contravened the provisions of Section 47 of CGST Act,
2017.

Late Fees
Year
CGST SGST Total
2019-20 2,075 2,075 4,150
2020-21 1,400 1,400 2,800
2021-22 2,250 2,250 4,500
5,725 5,725 11,450

Accordingly, auditee was requested to deposit the late fee amounting to Rs.11450/-
(CGST Rs. 5725/- & SGST Rs. 5725/-) under the provisions of Section 47 of CGST Act,
2017.

The auditee vide its reply dated 26-09-2024 accepted the contention of the para
and deposited the late fee vide DRC No AD030924006440K, AD030924006433F,
AD0309240064294 dated 26-09-2024. The Auditee also submitted Annexure-X in
this regard.

Para has been approved & Settled in the MCM dated 08.10.2024.

Para 3:- Non–reversal of ITC amounting to Rs. 1,18,47,675 /- on rebate and discounts
received by way of commercial credit notes for the period 2018-19 to 2022-23:-
Issue Involved:-

During the course of audit, on scrutiny of Financial records and Balance sheet of
the auditee, it has been observed that auditee has received
rebate/discounts/incentive which is booked as “ REBATE/DISCOUNT RECEIVED
SHOWN IN B/S, Trial Balance” which amounted to Rs. 4,23,13,126 /- for the
period 2018-19 to 2022-23. Year-wise detail is given below: -

REBATE/DISCOUNT RECEIVED
FY CGST SGST
SHOWN IN B/S, T.B
2018-19 57,22,769 8,01,188 8,01,188
2019-20 1,03,71,766 14,52,047 14,52,047
2020-21 1,06,56,241 14,91,874 14,91,874
2021-22 82,62,297 11,56,722 11,56,722
2022-23 73,00,054 10,22,008 10,22,008
Total 4,23,13,126 59,23,838 59,23,838
On test check as per the documents supplied by the auditee, it was found that
auditee’s suppliers had given discount to them by way of issuing commercial
credit notes without GST. The Auditee has availed the full ITC on the original
invoices but did not pay the full consideration to their suppliers which were
waived off by their suppliers through commercial credit notes. The Auditee was
required to reverse the proportionate ITC availed on said inputs as per the Rule
37 of the CGST Rules 2017 which amounted to Rs 1,18,47,675/- but they failed to
do so, thus the auditee has contravened the provisions of Section 16(2) of the
CGST Act, 2017 read with Rule 37 of the CGST Rules, 2017. The above said Input
tax credit is recoverable alongwith applicable interest u/s 50(3) alongwith
penalty u/s 74 of CGST Act,2017 under the provisions ofSection 16(2) of CGST Act,
2017 read with Rule 37 of CGST Rules 2017.

The auditee has not accepted the contention of the para and submitted a detailed reply..

The reply of the auditee does not appears to be tenable as the OIO dated 18-03-2024 passed
by ADC Shimla in the case of M/s Dev Bhumi on the identical issue has not been accepted by
the department and therefore the issue has not attained finality. In case the auditee do not
deposit the outstanding dues, an SCN would be issued to the safeguard the govt. revenue.

Para has been approved in the MCM dated 08.10.2024.

Para 4;-Non payment of interest amounting to Rs 618/- (CGST -309/- SGST- 309/-)
during the FY 2018-19:-

During the course of audit, it has come to that the auditee has late paid an
amount of Rs 43393/- in GSTR -3B for the month of Sept-2018. Interest
amounting to Rs 618/- was recoverable under Section 50 of CGST Act.

tax paid late interest

return period
CGST SGST Tax due No of days CGST SGST
Sep-18 20,901 20,901 43,393 30 309 309
Accordingly, auditee was requested to deposit an interest amounting to Rs 618/-
(CGST -309/- SGST- 309/-) under Section 50 of CGST Act 2017 under the
provisions ofSection 50 of CGST Act, 2017.

The auditee vide its reply dated 26-09-2024 accepted the contention of the para
and deposited the interest vide DRC No AD030924006425C dated 26-09-2024.
The Auditee also submitted Annexure-X in this regard.

Para has been approved & Settled in the MCM dated 08.10.2024.

Para-5;- Non reversal of unreconciled ITC amounting to Rs. 8,08,170/- (CGST

4,04,085/-, SGST- 4,04,085/- ) availed in excess in GSTR-3B vs GSTR-2A reflecting in
GSTR-9 table 8D returns: -
During the course of audit, it has been observed that the auditee has availed
excess ITC in GSTR-3B as compared to ITC reflected in GSTR-2A (as per Table-
8D of GSTR-9) during F.Y. 2018-19 to 2022-23. Year-wise detail is as under.

FY CGST SGST
2018-19 77,468 77,468
2020-21 3,25,723 3,25,723
2022-23 894 894
Total 4,04,085 4,04,085
The excess availment of ITC is in contravention to Section 16(2) of Central Goods
and Service Tax Act, 2017.

Accordingly, auditee was requested to reverse/deposit the excess claimed ITC

Rs. 8,08,170/- along with applicable interest and penalty under Section 50 and
73 of the CGST Act 2017 read with relevant provisions of SGST Act under the
provisions ofSection 16(2) of CGST Act, 2017.

The auditee accepted the contention of the para and deposited the outstanding
amount alongwith interest vide DRC No AD030924006425C, AD030924006433F,
AD0309240064484 dated 26-09-2024. The Auditee also submitted Annexure-X in
this regard.

Para has been approved & Settled in the MCM dated 08.10.2024.

Para-6;- Non-payment of interest amounting to Rs. 12,600/- [IGST] under Section 16(2)
of CGST Act 2017 read with Rule 37 of CGST Rules 2017 on account of late payment
made to suppliers beyond the period of 180 days: -

During the course of Audit, it was observed that the auditee has made late
payments to your supplier beyond a period of 180 days, thus contravening the
provisions of section 16(2) of the CGST Act, 2017 read with Rule 37 of CGST Act.
The auditee was required to deposit the interest as detailed below, but they
failed to do so.

It is, therefore, requested to deposit the above amount which is recoverable

under Section 50 of the CGST Act read with relevant provisions state laws under
the provisions of Section 50 of CGST Act, 2017.

The auditee vide its reply dated 26-09-2024 accepted the contention of the para
and deposited the interest vide DRC No AD030924006425C dated 26-09-2024.
The Auditee also submitted Annexure-X in this regard .

Para has been approved & Settled in the MCM dated 08.10.2024.

Para- 7;- Excess ITC amounting to Rs 1,09,690/- (IGST) availed in GSTR-3B return
than available in GSTR-2B return for the month of March-2022:-
During the course of audit, it has come to notice that auditee has availed excess
ITC amounting to Rs 1,09,690/- (IGST) in GSTR-3B return than available in GSTR-
2B return for the month of March-2022. The details are as under: -

Tax Period ITC claimed in GSTR-3B during the ITC auto-drafted in GSTR-2B during the Excess in ITC (GSTR-3B - GSTR-2B)
month month
IGST CGST SGST IGST CGST SGST IGST CGST SGST
Mar-22 3,03,817 32,13,31932,13,319 1,94,127 36,93,664 36,93,664 1,09,690 0 0

The excess ITC availed is in contravention to Section 16(2) (a) (aa) of CGST Act
read with Rule 36(4) (b) of CGST Rules read with Notification No 40/2021-CT
dated 29-12-2021 and is liable to recovered under Section 73 of CGST Act 2017
under the provisions ofSection 16(2) of CGST Act, 2017read with Rule 36(4)(b) of
CGST Rules.

The auditee vide its reply dated 26-09-2024 accepted the contention of the para
and deposited the tax amount vide DRC No: AD030924006440K dated 26-09-
2024. The auditee also submitted Annexure-X in this regard.

Para has been approved & Settled in the MCM dated 08.10.2024.

DISCLAIMER

The GST audit was conducted based on the documents/details disclosed and
submitted by the auditee. In future, if any information/details, contrary to that
submitted/disclosed by assesse during the course of audit or any other issue
come into the notice of department/Audit Commissionerate or any other tax
authorities, department keeps its right reserved to take action and further
examine the issue.

#ApprovedByDesignation#
Assistant Commissioner

Copy to:

1. M/s. P. C. Jain Cement Store, LANDRAN ROAD, LANDRAN ROAD, KHARAR,

SAS Nagar, Punjab, 140301.
2. The Deputy/Assistant Commissioner, CGST Division- Mohali-II for
information please.
3. The Superintendent, CGST Range-III, Division- Mohali-II for information
please.

#ApprovedByDesignation#
Assistant Commissioner