Debit n credit note

The seller does not necessarily need to upload a credit note in response. 

Here is how it works: The purchaser uploads a debit note to reflect an increase in tax liability or value of supply. The Seller should account for this debit note in their books and adjust their tax liability accordingly. 

The seller does not need to upload a credit note on the GST portal in this case. 

A purchaser cannot upload a debit note as a document that, by itself, reduces the seller’s GST liability. If the debit note records a reduction in price or taxable value, the seller must issue and report a corresponding GST credit note to reduce output tax, subject to the conditions and time limit under section 34 of the CGST Act. The purchaser’s debit note does not replace it.

If the purchaser’s debit note is only for an accounting or commercial adjustment and does not alter the original supply’s taxable value or tax, a GST credit note may not be required. The treatment depends on why the note was issued and whether GST is being adjusted.

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