Taxability of Financial credit notes / commercial credit notes under GST. There might be situations where an error is made in issuing the invoice or certain other errors might crop up with the quantity or quality of goods or services delivered. A Tax Credit Note is a written or electronic document to be recorded and issued by a registered supplier of goods or services on the occurrence of situations as prescribed by the GST Act and Rules. Credit Notes Under GST. Understanding Credit Note. Therefore ABC sends a debit note amounting to Rs. (a) name, address and Goods and Services Tax Identification Number of the supplier. The credit note can contain the lists of the products, quantities and agreed prices for goods or services. under the Companies Act, 2013. Where such accounts and documents are maintained manually, it should be kept at every related place of business mentioned in the certificate of registration and shall be accessible at every related place of business where such accounts and documents are maintained digitally. By buyer, on receiving damaged goods or short quantity. Your email address will not be published. Proudly created with Wix.com, Meaning of Debit Note and Credit Note and use in GST. 12 of 2017) (CGST Act): But later x realises that he has charged Rs 15 less by mistake. 10,000. It is not a law firm and does not provide legal advice. The following prescribed information must be included on all credit and debit notes: a statement or other indication that the document is a credit or debit note; GST (GOODS AND SERVICES TAX) Credit Note in GST. After receiving the material, ABC founds that the goods contain some defective goods of value of Rs. Read Also: Copy linkHindu Undivided Family and its Tax Benefits, Thus, when an invoice is issued and it is found that the taxable value or tax charged exceeds the actual taxable value or tax to be paid with regards to the supply of goods or services, or the goods are returned back to the supplier, or the goods and services are deficient or inadequate in terms of quality, then the supplier shall issue to the recipient a credit note entailing the prescribed particulars. For the purpose of GST, both debit and credit note need to be issued by the supplier of goods or services. It is opposite of debit note. GST takes care of credit notes as well, just like debit notes. The records of the credit note and debit note have to be retained until the expiry of seventy-two months from the due date of furnishing of annual return for the year pertaining to such accounts and records. Purpose of Credit note (Section 34) The credit note will be issued by the registered person (i.e. (c) nature of the document. Since it has a commercial impact, the same has to be informed or declared in GST returns in the month to which it prevails. A. Also, There is also a maximum time limit for including in, You can read more about credit note in GST. Otherwise, in cases where they are maintained digitally, they should be accessible at every related place of business. Debit Note and Credit Note in GST It is mandatory for a supplier of goods or services or both to issue a tax invoice. Credit Note in GST. There might be situations where an error is made in issuing the invoice or certain other errors might crop up with the quantity or quality of goods or services delivered. To ABC A/c                     10,000, Common Reasons for which Credit Note is issued. To regularize such situations, the supplier is allowed to issue a debit note or credit note, whatever the case warrants. A debit note helps in enhancing the value of goods and services stated in the original tax voice, whereas a credit note is used to amend or revise the original tax invoice in order to decrease the tax liability.