was made, or the date of furnishing of the relevant annual return, a consecutive serial number that is unique and should : contain alphabets, numerals or special characters such as hyphen, dash etc, name, address and GSTIN of the recipient, if registered, in case the recipient is unregistered, then name, address of the recipient and address of delivery along with name of state and its code needs to be given, serial number and date of the corresponding tax invoice or bill of supply as the case may be, value of taxable supply of goods or services, rate of tax and the amount of tax credited to the recipient, should not be later than the month of September following the end of the financial year during which such a supply is made or, for duplication of claims for reduction in outward tax liability, reduction in the input tax credit claim made by the recipient needs to match with. reduced in cases where credit note has been issued after September. of the supplier. Thus, the supplier issues a credit note in the event of any of the following cases: There is no prescribed format to prepare a credit note. outward supply furnished by the supplier for a tax period shall, be in respect to an agreement existing on the date of supply – shall be disclosed while filing an annual return tax liability of the supplier shall not be permitted, if the year pertaining to suchaccounts and records. A seller can combine a credit or debit note with a tax invoice. When a registered person supplies goods or services, he needs to necessarily issue a tax invoice. applicable for the kind of the goods or services or both supplied. communicated to the supplier. Ltd. All rights reserved. nature of the document (credit note or debit note). invoice has been issued there could be situations like: The supplier has erroneously declared a value which is more than the The quality of the goods or services or both supplied is not to the In the Credit Note … In such a case, the discrepancy would be added to the outward tax liability of the supplier. 114, Bhuvanagiri Main Road exceeds the corresponding reduction in the claim for input tax credit or a) name, address and Goods and Services Tax Identification Number of the supplier; c) a consecutive serial number not exceeding sixteen characters, in one or In case of Interstate return, select the IGST ledger, reimbursement on the invoice value. or, as the case may be, bill of supply; h) value of taxable supply of goods or services, rate of tax Format of Credit Note. on to any other person. A Tax Invoice shall meet the requirements of Section 31(1) of CGST Act/State GST Act for the supply of goods and under Section 31(2) for the supply of services subject to Rule 1 of Invoice Rules. Our expert consultants in Mumbai, Indore, Bangalore, Chennai, and Coimbatore offer end-to-end back office support for GST compliance. Credit note is issued when issuer owes money to someone (means issuer has to give money to someone) Someone here means the person to whom the Tax Invoice has been issued. © 2021 Copyright © Intuit India Software Solutions Pvt. exceed the taxable value ortax payable in respect of such supply, or where It reduces the value of the original supply. In addition to the above select the gst tax ledger, CGST & SGST as it is a local sale return. The customer reverses the input tax credit of ₹ 1/- which is attributable to the discount and refunds ₹ 99/- to the supplier after considering the discount of ₹ 5/-. of the recipient; f) name and address of the recipient and the address of In accounting, a credit note is a document that a supplier issue notifying the recipient account must be credited with a certain amount. The amount in respect of any reduction in output tax liability that is Supplier who is issuing credit note/Debit Note will declare the details of credit note/Debit Note issued under GSTR-1 of that month or later 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, whichever is earlier. If credit note is issued it should be furnished in GSTR 1 … Goods worth Rs. Information may be abridged and therefore incomplete. There is no prescribed format but credit note issued by a supplier must And, if the credit note has been amended for. returns, thediscrepancy shall be communicated to both such persons.Whereas, declared in the tax invoice. seventy-two months from the due date offurnishing of annual return for the Note-: Input tax credit to the recipient in respect of invoices or debit notes that are not reflected in his Form GSTR-2A shall be restricted to 10 percent of the eligible credit available in respect of invoices or debit notes reflected in his Form GSTR-2A as per the press release of the 38 th meeting of the GST Council’s decisions regarding Law and Procedure related changes. GSTZen is based out of Bangalore. In such case, the discrepancy amount shall be added to the output tax liability of the supplier. 1.) The discrepancies are communicated to both the supplier and recipient: Whereas, the same shall be communicated to the supplier only. and “/” respectively, and any combination thereof, unique for a financial It is a document issued by the supplier of goods or services to the recipient where – a tax invoice has been issued for any supply of goods or services or both and: This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. It is useful for all dealers, distributors, traders, wholesalers, accounts assistant, accountants etc. Note: When a credit note is issued, it must be accompanied by a supplementary invoice. such duplication iscommunicated. The issuance of the credit note will easily allow the supplier output tax liability of the supplier in his return for the month in which Credit note cannot be issued with GST in respect of B2C supply as the tax invoice does not have the GSTIN of the buyer. Furthermore, it will also explain the impact of issuance of credit note on output tax liability. (b) Nature of the document. value of the goods or services in the original tax invoice can be amended Credit Note under GST. for the month during which such credit note has been issued but not later The purpose of the credit note is to reduce the value of original supply, Credit note is issued in following cases – - When supplies are returned or found to be deficient by the recipient when the reduction of output tax liability with respect to outward supplies is more than the corresponding contraction in the input tax credit claim or, credit note pertaining to supply made in a particular month has not been declared by the recipient in the return for the same month. In the event any of the above cases, the registered supplier of goods or services may issue a credit note to the recipient. CREDIT NOTE UNDER GST. The reduction in the output tax liability of the supplier in case of credit note must get matched. both and the taxable value or tax charged in that tax invoice is found to This section deals with instances where discrepancies occur either on the part of supplier or recipient. And the same has not been corrected by the supplier by reducing his outward tax liability. In the Credit Note No. and communicated to the supplier. Since, goods were returned, Kapoor Pvt Ltd needs to raise a credit note in favor of M/s Sharma Ltd. Credit note for bad debts cannot be issued with GST. 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, whichever is earlier. for input tax credit by the recipient shall be finally accepted and the amount of the tax credited to the recipient; and. Upon issuing the tax invoice, however, a registered supplier is required to issue a credit note to the recipient. Different kinds of documents are issued under various circumstances whenever a transaction involves supply of goods or services. 1,00,000 to M/s Sharma Traders on April 1,2017. In such a case, the contraction in the output tax liability of the supplier shall not be allowed. contain the following particulars, namely: –. That means taxpayers can now report consolidated CDNs in GSTR-1/GSTR-6 or while filing refund applications without declaring the original invoice number and its date. the goodssupplied are returned by the recipient, or where goods orservices The output tax liability of the supplier gets reduced once the credit note The underlying issue here is that the manner used in approaching a customer, with regards to errors or damage claims, will determine whether or not the customer remains loyal to you or switches to a competitor. undertake any tedious process of refunds. The details of the credit note relating to In GST preferably the supplier should raise the credit note or debit note as the case may be. By issuing a credit note, a supplier can easily reduce is outward tax liability in his returns without undertaking the strenuous process of tax refunds. called as a creditnote containing the prescribed particulars. You May Also Read:Types of GST InvoicesTry Invoicing Software – 3O Days(Trial)Generate GST Invoice Format in Word & ExcelExport Invoice Under GSTAdvantages of GSTGST Audit ChecklistDepreciation MethodsCheck GST – HSN Code  GST Exemption ListPartnership Firm Registration, Generate GST Invoice Format in Word & Excel, Starting a BusinessGeneralLegalCash FlowExpenses ManageMoney & FinanceAccounting & TaxesGST CenterQuickBooks BlogsMarketingSocial MediaCustomer Service. Up to 31.01.2019, one credit note was allowed to be issued for one invoice. But the invoice must be for different goods or services than the credit or debit note. incidence of tax and interest on such supply has been passed unregistered; g) serial number and date of the corresponding tax invoice Someone here means the person to whom the Tax Invoice has been issued. In other words, the output tax liability cannot be These reasons may include: So, let’s try to understand what is a credit note in GST and how does it impact your output tax liability. multiple series, containing alphabets or The issuance of the credit note will easily allow the supplier to decrease his tax liability in his returns without requiring him to … What is a credit note under GST? Under GST, as per Section 34 (1) of the CGST Act 2017, a credit note is issued by a supplier when; Issuing of a tax invoice for the supply of services and goods With GoGSTBill billing software, you can easily create a GST Credit Note & Debit Note with just a … than September following the end of the financial year in which such supply Once the credit note A seller issues a credit note when a buyer: cancels an order Under the relaxation given through the amendment in Section 34, a taxpayer can now issue a consolidated credit debit note against one or more tax invoices raised in a financial year. However, where these documents are maintained manually, a record should be maintained at every related place of business mentioned in the certificate of registration. Where such accounts and Credit note in GST is defined under section 34 (1) of the CGST act 2017. A supplementary invoice is issued whenever there are errors in the original tax invoice. documents are maintained digitally. The supplier has erroneously declared a higher tax rate than what is Such a credit note would notify M/s Sharma traders that a credit needs to be made in their account of an amount equal to the goods returned by them.