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What are Debit and credit note under GST ?

What are Debit and credit note under GST ?

what is called as credit note

A supplier of goods or services or both is mandatory required to issue a tax invoice.However, during the course of trade or commerce, after the invoice has been issued there could be situations like:

• The supplier has erroneously declared a value which is more than the actual value of the goods or services provided.

• The supplier has erroneously declared a higher tax rate than what is applicable for the kind of the goods or services or both supplied.

• The quantity received by the recipient is less than what has been declared in the tax invoice.

• The quality of the goods or services or both supplied is not to the satisfaction of the recipient thereby necessitating a partial or total reimbursement on the invoice value.

• Any other similar reasons.

In order to regularize these kinds of situations the supplier is allowed to issue what is called as credit note to the recipient. Once the credit note has been issued, the tax liability of the supplier will reduce.

Meaning

Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient what is called as a credit
note containing the prescribed particulars.

Format
There is no prescribed format but credit note issued by a supplier must
contain the following particulars, namely:

(a) name, address and Goods and Services Tax Identification Number
of the supplier;

(b) nature of the document;

(c) a consecutive serial number not exceeding sixteen characters, in
one or multiple series, containing alphabets or numerals or special
characters hyphen or dash and slash symbolised as “-” and “/”
respectively, and any combination thereof, unique for a financial
year;

(d) date of issue;

(e) name, address and Goods and Services Tax Identification Number
or Unique Identity Number, if registered, of the recipient;
(f) name and address of the recipient and the address of delivery,
along with the name of State and its code, if such recipient is
un-registered;

(g) serial number and date of the corresponding tax invoice or, as the
case may be, bill of supply;

(h) value of taxable supply of goods or services, rate of tax and the
amount of the tax credited to the recipient; and
(i) signature or digital signature of the supplier or his authorised
representative.

Adjustment of tax liability

The person who issues a credit note in relation to a supply of goods
or services or both must declare the details of such credit note in the
return for the month during which such credit note has been issued
but not later than September following the end of the financial year in

 

What are Debit Notes :

Introduction:
A supplier of goods or services or both is mandatory
required to issue a tax invoice. However, during the course
of trade or commerce, after the invoice has been issued there
could be situations like:
• The supplier has erroneously declared a value which is less than the actual value of the goods or services or both provided.
• The supplier has erroneously declared a lower tax rate than what is applicable for the kind of the goods or services or both supplied.
• The quantity received by the recipient is more than what has been declared in the tax invoice.
• Any other similar reasons.

In order to regularize these kinds of situations the supplier is
allowed to issue what is called as debit note to the recipient.
The debit note also includes supplementary invoice.
Meaning:

When a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note containing the prescribed particulars.

Format:
There is no prescribed format but debit note issued by a supplier must contain the following particulars, namely: –

a) name, address and Goods and Services Tax Identification Number of the supplier;
b) nature of the document;
c) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or
numerals or special characters hyphen or dash and slash
symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year;
d) date of issue;
e) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered,
of the recipient;
f ) name and address of the recipient and the address of
delivery, along with the name of State and its code, if
such recipient is un-registered;
g) serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
h) value of taxable supply of goods or services, rate of tax
and the amount of the tax debited to the recipient; and
i) signature or digital signature of the supplier or his authorized representative.

Tax liability:

The issuance of a debit note or a supplementary invoice
creates additional tax liability. The treatment of a debit
note or a supplementary invoice would be identical to the
treatment of a tax invoice as far as returns and payment are
concerned.

Updated: July 25, 2019 — 6:18 am

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