How to treat the transaction for which Credit Note issued and also Purchase Invoice Received?

He can rectify two way with considering /Discussing Mr A & B...


1. Mr A will take B's invoice as purchase and Take ITC. Later or now he can sale the 20 items again with a sale invoice...

or

2. Mr B can prepare credit note for sale of 20 item...

As per Section 34 Of CGST Act : The credit Note & Debit Note can be Issued by only a person who has issued the Invoice (Supplier) in GST Law.

So in above case Mr. B has to reverse the Tax invoice Issued & account the credit Note issued by Supplier .

The Reason that only Only Supplier can Issue CNT/DNT in GST Law is :
1. It's specifically prescribe in Section 34(1)
2. As per GST return format also Need to upload the Outward supply means it's supplier who upload his GSTR1 on that basis it get reflected in GSTR 2 of Recepient.
3.In E-way Portal Do not accept the Debit Note (For Goods Return ) by Recepient. The Supplier can Issue credit Note for Goods return

Note : Debit Note can be issued by Recepient only for Accounting Purpose.

Yes... Yes... Yes...

AS PER GST "LAW" You are correct Mr Pankaj Rawat Ji... Here no need law points. bcoz, transactions already done... Right?!

But,

What is the solution based in the query...? and

Say Your suggestion for the said transactions...!!!

Thanks for your valuable opinions... I have suggested Mr.A to sale those 20 items again to Mr. B, hence excess ITC portion will paid along with the Output Tax of the current month.

No... Think about the above said (by you) transactions with my reply...

Mr A sell 100 items. 20 items returned from buyer to A and A prepare CN. Here A's activity is completed against his sale.
So, A's output tax less through CN.

Also the same is ITC to Buyer and the ITC value will be less in buyer end. But, Not do that by buyer.

He prepared Sale invoice instead DN. But, His liability is increased. No more changes final figure...

Here Buyer will make CN for 20 items then all the problems will be solve...

Originally posted by : RAJA P M
	No... Think about the above said (by you) transactions with my reply...Mr A sell 100 items. 20 items returned from buyer to A and A prepare CN. Here A's activity is completed against his sale.So, A's output tax less through CN.Also the same is ITC to Buyer and the ITC value will be less in buyer end. But, Not do that by buyer.He prepared Sale invoice instead DN. But, His liability is increased. No more changes final figure...Here Buyer will make CN for 20 items then all the problems will be solve...

 

Whatever you said is correct but main thing, as per my understanding, is that Mr. A has taken benefit twice of the same amount (1st by issuing CN, and 2nd, by claiming ITC). On the other side, Mr. B has paid twice of the same amount. Hence, from the viewpoint of Mr.A, he has to reverse the benefit availed extra. Right?

So, he can reverse such extra benefit either by reversing the ITC along with Interest or he can show this as sale, so that his current month's output liability would increase by that amount. Hope, I am able to express my opinion.

I am suggesting this because I was told that the business transactions are not going on currently with Mr.B, hence, it's not possible to ask Mr.B for making CN.

Yes... You are correct if A availed ITC in Invoice of 20 item. If availed then he will be reverse the same...


But, As per Your reply (no business to B) You can suggest as per the above...

GOOD LUCK...

Thank you. I think I have given reasonable advice.

You are most welcome dear...

Yes... If business not continuing A & B.

But, Normal activities CN will be preparable in supplier end.

If Supplies made wrong (or any other problems) then Supplier will be prepare CN and less his output tax.
The same time Buyer will less his ITC values and Can be prepare DN...

Raha sir, it is mandatory to issue dn is against credit not?????

@ Mr Yash Jain.,


It's not mandatory under GST.

But, As per accounting standards the Credit note will be accountable as Debit note in Buyers account...

So, No question required.