Taxpayers often mix up credit / debit notes with amendments to tax invoices under the GST regime. Hence, the object of this post is to understand the circumstances in which credit / debit notes can be issued and when amendments to tax invoices should be recorded in the GST returns.
CIRCUMSTANCES WHERE CREDIT NOTES CAN BE ISSUED
Credit notes with tax implications (viz., those which reduce the GST liability) can be issued under the following circumstances:
- If the taxable value charged in a tax invoice is found to exceed the taxable value payable in respect of the supply; or
- If the tax charged in a tax invoice is found to exceed the tax payable in respect of the supply; or
- If the goods supplied are returned by the recipient; or
- If the goods / services supplied are found to be deficient.
CIRCUMSTANCES WHERE DEBIT NOTES CAN BE ISSUED
Debit notes can be issued:
- If the taxable value charged in the tax invoice is found to be less than the taxable value payable in respect of the supply; or
- If the tax charged in the tax invoice is found to be less than the tax payable in respect of the supply.
CIRCUMSTANCES WHERE AMENDMENTS SHOULD BE RECORDED IN GST RETURNS
Amendments to tax invoices (viz., B2B / B2C / Exports) should be recorded if such tax invoices were issued correctly but were incorrectly uploaded in the GST returns. On the other hand, if the tax invoices were issued incorrectly, credit / debit notes should be duly passed and recorded in the GST returns.
