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In GST how to treat 'Debit Note' received from Buyer.

andy (Designer) (130 Points)

28 July 2020

Hi, here's a query related to debit notes.

I'm a seller & have received total 10 debit notes from one of my b2b registered buyer in the year 2019-20

amounting to total Rs 10,000 + 1,800 tax = 11,800

So far I haven't used any of these debit notes in either GST-1 or GST3B

May i know how & where these entries need to be entered correctly.

Regards

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7 Replies

jayendra Gaonkar (Asst. Manager) (216 Points)
Replied 28 July 2020

On the basis of debit note received from the supplier, you need to raise credit note in your system. Thereafter, you need to show such credit note entries in GSTR 1 under credit note tile. In GSTR 3B you need to reduce your liability up to extend of credit notes booked. Alternatively, you may also it input tax credit instead of reducing tax liability and set it off.

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 28 July 2020

No you cannot reduce your ITC because your dealer must have reduce his ITC .

As per Section 34 of CGST Act the Supplier can issue Debit/Credit note.

So even though your dealer have issued the debit note you are required to issue Credit Note for the same & report it in your GSTR 1 and reduce your output tax in your corresponding GSTR 3B.

andy (Designer) (130 Points)
Replied 29 July 2020

Originally posted by : Pankaj Rawat
	No you cannot reduce your ITC because your dealer must have reduce his ITC . As per Section 34 of CGST Act the Supplier can issue Debit/Credit note. So even though your dealer have issued the debit note you are required to issue Credit Note for the same & report it in your GSTR 1 and reduce your output tax in your corresponding GSTR 3B.

Thanks for helping me out. Pankaj Ji

Yes I'm the supplier here & my party, the recipient has issued me debit notes.
You are suggesting that I've to raise a credit note here, Am i correct.?

And is it advisable to raise credit notes against all 10 debit notes (2019-20) in my
quarterly September GSTR-1 as i've already filed GSTR-1 for June or should i amend June GSTR-1.

Also Is there any time limit for utilizing missed debit notes ? Thanks

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 29 July 2020

DEAR ANDY

YES CORRECT.

YOU CAN RAISE ONE CREDIT NOTE AGAINST ALL THE 10 DEBIT NOTE. BUT THE LIMITATION OF PORTAL IS THAT IT ACCEPTS ONE CREDIT NOTE AGAINST ONE BILL. MEANS YOU CANNOT ISSUE ONE CREDIT NOTE AGAINST SEVERAL BILLS. INFACT THE LAW HAS BEEN AMENDED THAT IT CAN BE ISSUED AGAINST SEVERAL BILLS, BUT PORTAL DO NOT ACCEPTS IT.

YOU CANNOT AMEND THE GSTR-1 JUNE-2020, AS THE AMENDMENT CAN BE DONE ON TRANSACTIONS WHICH ARE ALREADY DECLARE THEREIN. SO YOU CAN ADD THOSE CREDIT NOTE WITH ITS ORIGINAL DATE (ie 2019-20) IN SEPT-2020 month GSTR-1.

YES YOU CAN DO ANY OMISSION/RECTIFICATION FOR FY 2019-20 TILL SEPT-2020 (REFER SECTION 34 CGST)