GST on Debit Note, Goods and Services Tax - GST

[Kaustubh Karandikar]

XYZ Ltd. are procuring material from local supplier against advance license invalidation letter. XYZ are getting benefits from supplier against invalidation viz.

1) Cash discount for immediate payment

2) Invalidation benefit of ₹ 4.5 per kg

3) Rate difference between PO rate and Market rate as on date of supply (This can be receivable or payable).

XYZ will be issuing Debit Note to the supplier for getting these benefits. Is XYZ required to pay GST on the debit note amount?

Posts / Replies

[YAGAY andSUN]

In GST Regime, supplier of the goods/service is authorized to issue Credit/Debit Notes to the Customer. Please check the provision. If your suppliers charge GST on Debit Note then you have to pay it.

on point 1 No GST is applicable. On point no. 2 & 3 GST can be charged by your supplier.

[Ganeshan Kalyani]

Sir, the benefits as mentioned in points 1, 2 & 3 corresponds to original supply. So, to adjust the supply the supplier will issue credit note to the buyer. The supplier can issue credit note with GST or without GST. If he raises credit note with GST, he has to fulfill certain conditions. Thanks.