Debit note and credit note - GST, Goods and Services Tax - GST

[K.Srinivasan Kuppuswamy]

Sir,

We have the following query in respect of charging GST on sales return / purchase return/ price reduction/price increase

1.Sales returns through Delivery advice

Some of the customers sending the customer returns in delivery challan without GST

2. Sales returns through Tax Invoice

Some of the customers sending the customer returns in tax invoice with GST for which we need to

3. Price decrease/reduction

The price decrease / reduction credit note to be issued without GST. Since already we have charged GST on the higher price and customer availed the ITC credit we need to issue the credit for the material value.

However some of the customers insists price reduction credit note also with GST only.

4. Price Increase debit note

The price increase debit note to be issued with GST quoting the existing relevant supply invoice number.

5. Purchase returns

We are issuing the purchase returns invoice as soon as the material rejected by stores without GST

The vendors insisting the rejection invoice with GST.

Request your opinion in this regard.

What is the procedures to be followed for Sales return through delivery advice/ sales return through tax invoice

price reduction/ price increase/purchase returns

Regards

K Srinivasan

Posts / Replies

[Ganeshan Kalyani]

Refer Section 34 of CGST Act which provides for Credit note and debit note.

[ANITA BHADRA]

Dear Sir

First at all , any debit credit note is to be issued by the supplier only .

Recipient will not issued any invoice , with or without GST .

Issue of invoice by registered recipient were to be applicable in case sale made prior to GST implemented date ( Sec 142 ) .and return post GST implementation

Further , Debit /Credit Note will have details of original tax invoice and also indicate taxable value ( of goods return ) and GST component on it .

Your GSTR 1 will also indicated details of Debit/Credit Notes issued . This will matched with GSTR 2 of the recipients .

You need not to issue any invoice for purchase return . Your supplier will issue credit note in case of purchase return by you

Regards

[Ramaswamy S]

Dear Querist:

The credit note and debit note to be issued by the supplier of the goods/ services as the case may be and to adjust the tax liability accordingly.

The movement of the goods rejected (sales / purchase returns) on a Delivery Challan. No tax is payable as it is not a supply. Supplier shall issue the Credit Note.

If the Invoice is to be raised for the return of the goods treating it as a supply, then according to the provisions of valuation at the time of return, the value of the goods needs is 10% over and above the purchase/ acquisition price and the GST payable is more than the inward GST So it is not advisable to take the invoice route

There is also an FAQ in the earlier days on the matter.

Regards

S.Ramaswamy

[Ganeshan Kalyani]

The responsibility of issuing credit note or debit note is cast on the supplier of goods or services.

[Mathurthi RamKumar]

Dear Sir,

With reference to the above Q&A, Kindly clarify me that normal debit note and credit notes will applicable for before gst or not? Also kindly advise for below transaction.

Agent give his commission invoice with gst. This commission will adjust for other parties balance payments.

for above - Before GST i issue cr note to agent. I think as per GST rules now this transaction not under GST credit note. Am i correct? Becoz GST cr note will issue when supply / purchase will attract GST only.

Kindly advise me. How to accounting for agent commission invoices.

Thanks in advance.

Regards

M.RamKumar

[Ramaswamy S]

Please refer rule 53 of CGST Rules.