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Bill Cancellation

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Vishal mookim

17 Points Posted on 22 February 2021

Is cancellation of GST invoice possible which has been raised in November 2020.
GST3B and GSTR1 submitted.

( Actual Scenario - Customer took materials in credit on November. he is not paying.
now he is giving back the materials and the bill) he has not taken entry of the bill.

Customer is registered in regular scheme of GST

Replies (5)

Quick Summary

If a customer returns materials and wishes to cancel a GST invoice raised in November 2020, outright cancellation might be tricky as GSTR1 and GST3B have already been filed. The recommended approach is to issue a credit note, which should be reflected in your next GSTR1 filing. While direct cancellation is possible under specific conditions like no goods movement and no payment received within the same month, using a credit note is generally better for accounting. Alternatively, you could amend the invoice if feasible.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 22 February 2021

Few facts needs to be understood before taking the decision.

Is the date of invoice and date of cancellation in same month?
Is there a movement of a single goods before the deal was cancelled?
Its recommended to issue a credit note instead of cancelling invoice for the sake of management of accounts.

However, if there is no movement of goods as well as there is no receipt of payment and where you expect that the deal is not gonna crack on a condition that everything falls in same month then I suppose one can also cancel the bill.