How and when to issue Debit Note and Credit Note under GST

How and when to issue Debit Note and Credit Note under GST in 10 simple points.

1. Taxpayer cannot make changes in tax invoice after it uploads on GSTN. If any changes are required to be done then they will be made through debit and credit note.

2. Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note

3. Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted

4. No reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.

5. Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note

6. Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted.

7. Expression "debit note" shall include a supplementary invoice. Since under GST both debit notes and credit notes are to be issued only by a supplier and in case of debit note there will definitely be immediate increase in tax liability of the supplier, though the recipient may or may not claim the benefit of this increased tax due to many reasons like recipient may be a composition dealer, a customer etc. so, no such extended time limit to issue debit notes is provided in the act.

8. Credit or Debit note shall contain serial number and date of the corresponding tax invoice or, as the case may be, bill of supply.

9. The details of outward supplies of goods or services or both furnished in Form GSTR-1 shall include debit and credit notes, if any issued during the month for invoices issued previously.

10. The details of inward supplies of goods or services or both furnished in Form GSTR-2 shall include debit and credit notes, if any, received from supplier.

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CA Varun Chadha 
on 19 June 2017
Published in GST
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