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Commercial credit note.

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CA NAMRATA KAYARWAR

316 Points Posted on 14 June 2023

In case of cement suppliers the company bills say 1 bag @ 250/- to the taxpayer. Taxpayer sales it @ 245/- bag. in month end company gives various discounts like
quantity discounts
scheme discounts
Cash discounts etc.

company has not issued credit note in gst (not reflecting in 2A). Because the credit note not reflecting in 2A Taxpayer has not reversed ITC on the same.
Officer is asking to reverse the same. As per GST on commercial credit notes which are post sales, the Taxpayer have to reverse ITC even if supplier (company) has not reflected the same in GST??

Replies (2)

Quick Summary

This discussion clarifies the GST implications of commercial credit notes, particularly regarding post-sale discounts from suppliers. It addresses whether taxpayers must reverse their Input Tax Credit (ITC) even if the supplier hasn't reflected the credit note in their GST returns (GSTR-2A/2B). The consensus is that if a commercial credit note has no GST impact and the supplier hasn't adjusted their tax liability, ITC reversal is generally not required. Evidence of the commercial credit note can be used to support this position with tax officers.

CS Advocate Abhishek Goyal

M Com FCS LLB M-AIMA

14046 Points Posted on 15 June 2023

No, commercial credit notes without any GST impact are valid. No need to reverse the GST if opposite party has not shown the same in your 2A or 2B. If opposite party has not shown the credit notes it is an indication that the opposite party might not have reduced their outward tax liability in GSTR-1 and 3B. You can convince the officer by showing him the commercial credit notes received from company if any and can argue that company has also not reduced their liability in this regard.