GST – GST Law and Procedure – 015 – Chapter Fifteen Credit Note in GST Introduction: A supplier of goods or services or both is mandatorily 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 Meaning Whe
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ancial 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 which such supply was made, or the date of furnishing of the relevant annual return, whic
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tion of output tax liability in respect of outward supplies exceeds the corresponding reduction in the claim for input tax credit or the corresponding credit note is not declared by the recipient in his valid returns, the discrepancy shall be communicated to both such persons. Whereas, the duplication of claims for reduction in output tax liability shall be communicated to the supplier. The amount in respect of which any discrepancy is communicated and which is not rectified by the recipient in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the supplier in his return for the month succeeding the month in which the discrepancy is communicated. The amount in respect of any reduction in output tax liability that is found to be on account of duplication of claims shall be added to the output tax liability of the supplier in his return for the month in which such duplication is communicated. Records The records of the credit
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