What is meant by a 'Debit Note and Credit Note'?

What is meant by a ‘Debit Note and Credit Note’?

Ans.

Credit and Debit Notes [Sec. 34, CGST Act]

Issue of a ‘Debit Note’ or ‘Credit Note‘

(1) Where a tax invoice has been issued for supply of goods and/ or services; and

(i) The taxable value and/or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or

(ii) Where the goods supplied are returned by the recipient, or where services supplied are found to be deficient. Then, the registered person, who has supplied such goods and/ or services, may issue to the recipient a credit note.

No reduction in output tax liability of the supplier is permitted if the incidence of tax/interest on such supply has been passed on to any other person.

(2) Where a tax invoice has been issued and the taxable value and/or tax charged in the tax invoice is found to be less than the taxable value and/or tax payable in respect of such supply, then the registered person, who has supplied such. goods and/or services, may issue to the recipient a Debit Note.

(3) The expression “Debit Note” shall include a “Supplementary Invoice”. Credit notes and debit notes shall contain the prescribed particulars otherwise, these. notes may not be considered for adjustment of tax liability.

Declaration of Credit/Debit Note in the Return

(1) Credit Note: Any registered person who issues a credit note shall declare the details of such credit note in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in such manner as may be prescribed.

However, if the incidence of tax and interest on such supply has been passed on to any other person, then no reduction in output tax liability of the supplier shall be permitted.

(2) Debit Note: Any registered person who issues a debit note shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.

Contents of a ‘Debit’ or ‘Credit note’.

A Credit or Debit Note shall contain the following details:

(a) The word “Debit/Credit Note”, wherever applicable, indicated prominently,

(b) Name, address, date of issue and GSTIN of the supplier,

(d) A consecutive serial number containing alphabets or numerals,

(e) Name, address and GSTIN or UIN, if the registered recipient, and the address of delivery, along with the name of State and its code, if such recipient is unregistered,

(f) Serial number and date of the corresponding tax invoice or, bill of supply,

(g) Value of taxable supply of goods or services, a rate of tax and the amount of the tax credited or debited to the recipient, and

(h) Signature or digital signature of the supplier or his authorized representative.

(2) In case of continuous supply of services, the invoice shall be issued:

(i) Where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment,

(ii) Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment,

(iii) Where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.

Revision of invoice in case of a New Registration [Sec. 31(3) & Rule 53 CGST Act]

In case of new registration, the supplier may issue revised invoice against the invoice already issued during the period starting from the effective date of registration till the date of issuance of a certificate of registration to him, within 1 month from the date of issuance of a certificate of registration.

Issuance of the invoice in case of ‘Reverse Charge’ [Sec. 31(3) & Rule 52]

A registered person, who is liable to pay tax under reverse charge shall issue an invoice in respect of goods/services received by him from the supplier who is not registered on the date of receipt of goods/ services. Such registered person shall also issue a payment voucher at the time of making payment to the supplier. However, such provision of reverse charge deferred till 30.9.2019.

Issuance of Tax Invoice for petty amount

The registered person may not issue a tax invoice if the value of the goods or services supplied is less than 200, subject to the conditions, the recipient is not a registered person, and the recipient does not require such invoice, and shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.

Manner of issuance of Tax Invoice [Sec. 31(2) & Rule 48]

(A) Supply of goods

In case of supply of goods, the invoice shall be prepared in triplicate, in the following manner:

(a) Original copy being marked as “

(b) duplicate copy being marked as “Duplicate for Transporter”, and

(c) Triplicate copy being marked as “Triplicate for Supplier”. The serial number of invoices issued/cancelled during a tax period shall be furnished electronically through the Common Portal.

(B) Supply of services

In case of supply of services, the invoice shall be prepared in duplicate, in th, following manner:

(a) Original copy being marked as “ORIGINAL FOR RECIPIENT”, and

(b) Duplicate copy being marked as “DUPLICATE FOR SUPPLIER”.

The serial number of invoices issued/cancelled during a tax period shall furnished electronically through the Common Portal.