Debit note to supplier of RCM
This query is : Resolved
05 August 2024
Dear sir,
We have to give Debit note to RCM supplier, so i have few question.
Shall we have to Charge GST to that supplier ?
If we have to not charge GST then we have to reduce the Rcm liablility ?
How to shown the transaction ?
Please guide !
We have to give Debit note to RCM supplier, so i have few question.
Shall we have to Charge GST to that supplier ?
If we have to not charge GST then we have to reduce the Rcm liablility ?
How to shown the transaction ?
Please guide !
12 August 2025
When you issue a debit note to a supplier under Reverse Charge Mechanism (RCM), here’s how you should treat GST and accounting:
1. Do you charge GST on debit note to supplier under RCM?
No, you do NOT charge GST on the debit note issued to the supplier.
Under RCM, the recipient (you) is liable to pay GST on the supply, not the supplier.
So, when you raise a debit note for additional amount, you do not add GST on it to the supplier.
2. Do you reduce the RCM liability if the debit note reduces the original invoice amount?
If the debit note increases the amount payable to the supplier, then your RCM liability increases accordingly.
If the debit note decreases the amount payable (in case of a credit note or negative debit note), then you should reduce your RCM liability accordingly.
The RCM GST payable should be calculated on the net amount after adjustment.
3. How to show this transaction in GST returns?
Debit notes to supplier under RCM should be reported in GSTR-3B and GSTR-2A/2B as part of the inward supplies liable to RCM.
In GSTR-3B, report the updated RCM liability (including debit notes) under “Inward supplies liable to reverse charge”.
Maintain proper records and documentations for audit and compliance.
1. Do you charge GST on debit note to supplier under RCM?
No, you do NOT charge GST on the debit note issued to the supplier.
Under RCM, the recipient (you) is liable to pay GST on the supply, not the supplier.
So, when you raise a debit note for additional amount, you do not add GST on it to the supplier.
2. Do you reduce the RCM liability if the debit note reduces the original invoice amount?
If the debit note increases the amount payable to the supplier, then your RCM liability increases accordingly.
If the debit note decreases the amount payable (in case of a credit note or negative debit note), then you should reduce your RCM liability accordingly.
The RCM GST payable should be calculated on the net amount after adjustment.
3. How to show this transaction in GST returns?
Debit notes to supplier under RCM should be reported in GSTR-3B and GSTR-2A/2B as part of the inward supplies liable to RCM.
In GSTR-3B, report the updated RCM liability (including debit notes) under “Inward supplies liable to reverse charge”.
Maintain proper records and documentations for audit and compliance.
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