Section 34 of CGST Act, 2017 read with Rule 53

1) Relevant terms:

A. Section 2(41): Document includes written or printed record of any sort and electronic record (B).

B. As per clause (t) of section 2 of the Information Technology Act, 2000: “Electronic record” means data, record or data generated, image or sound stored, received or sent in an electronic form or microfilm or computer generated micro fiche;

C. As per section 2(94) “registered person” means a person who is registered under section 25 (Procedure for registration) but does not include a person having a Unique Identity Number.

D. Tax Invoice section 31 of CGST Act, 2017:

Refer: Time of Supply under Forward Charge (in the link below)

https://taxguru.in/goods-and-service-tax/time-supply-tos-gst.html

2) Handy interpretation of section 34:

Foundation Credit Note Debit Note
Section Explanation Section Explanation
Definition 2(37) Document issued by the registered person under subsection (1) of section 34 of the CGST Act, 2017. 2(38) Document issued by the registered person under subsection (3) of section 34 of the CGST Act, 2017.
 

Issuance of Debit/ Credit Note

 

34(1)

If registered Taxable person issues one or more tax invoice for supply of goods or services or both and if:

A. Taxable value or the tax payable mentioned in the invoice is higher than the actuals or

B. Purchase return by the recipient or

C. Goods or Services or both supplied was found to be defective or

Then, a registered taxable person may issue one or more Credit Note to the recipient containing the particulars as prescribed under Rule 53(1A) & 53(2).

 

34(3)

If registered Taxable person issues one or more tax invoice for supply of goods or services or both and if:

A. Taxable value or the tax payable mentioned in the invoice is less than the actuals.

Then, a registered taxable person may issue one or more Debit Note to the recipient containing such particulars as prescribed under Rule 53(1A) & 53(3).

On the issue of Debit note the tax liability of the supplier increases.

Declaration of details in GSTR 34(2) The details of Credit Note issued shall be furnished in the return for the month during which the Credit Note has been issued but not later than:

While at the earliest of:

A. September of the following Financial Year or

B. Furnishing the relevant Annual Return.

The tax liability shall be adjusted in the prescribed manner.

34(4) The details of the debit note shall be furnished in the return for the month on which such debit note is issued by the registered taxable person.

The tax liability shall be adjusted in the prescribed manner.

Debit note also includes a supplementary note.

3) Rule 53 of the CGST Act, 2017:

A. Rule 53(1): Particulars of Tax Invoice:

i. The term Revised Invoice must be indicated prominently

ii. Name, address and GSTIN:

  • of the supplier and
  • of the recipient, if registered,

iii. Name, address of the recipient and the address of delivery, along with the name of the state and its code, in the case of an unregistered person,

iv. A consecutive serial number not exceeding sixteen characters,

v. Date of issue of the document,

vi. Serial Number and date of the corresponding tax invoice or, as the case may be, bill of supply,

vii. A signature or digital signature of the supplier or his authorised representative,

viii. Rule 51(2): If a registered taxable person has been granted registration before the issuance of the certificate of registration, then such RTP may issue a revised Tax invoice in respect of supplies made during such period (from the date he was granted registration till the date of issuance of the certificate of registration).

  • Provided that such registered person may issue consolidate revised tax invoice for all taxable supplies made to unregistered person
  • Provided further that such consolidated revised invoice may be issued separately in respect of all the recipient located in a state.

B. Rule 53(1A): Particulars of Debit or Credit Note:

i. Name, address and GSTIN:

  • of the supplier and
  • of the recipient, if registered,

ii. Name, address of the recipient and the address of delivery, along with the name of the state and its code, in the case of an unregistered person,

iii. Nature of document,

iv. A consecutive serial number not exceeding sixteen characters,

v. Date of issue of the document,

vi. Value of taxable supply of goods or services, rate of tax and the amount of the tax credited or, as the case may be, debited to the recipient,

vii. Serial Number and date of the corresponding tax invoice or, as the case may be, bill of supply,

viiii. A signature or digital signature of the supplier or his authorised representative,

ix. Rule 53(3): If a debit note is issued in connection with:

  • Section 74: Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts,
  • Section 129: Detention, seizure and release of goods and conveyances in transit.
  • Section 130: Confiscation of goods or conveyances and levy of penalty

Then such debit note shall contain the words Input Tax Credit not admissible.

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6 Comments

  1. Kashu Patel says:

    I have a doubt related to Cr. Note and Dr. Note.
    If any Supplier provide discount to their dealers and the obligation is on dealer than whether it is commercial transaction or not??????

      1. Kashu Patel says:

        Man,
        As per sec15(3) of GST.
        If Discount given after supply of Goods or services or Both.If agreement made for such discount before or at the time of supply than supplier shall issue Cr. Note.
        But as per Notifications 92/2019 it clarified that in case of secondary discount commercial cr. Note shall be issued.
        So please explain me whether commercial cr. Note shall be issued in my earlier query

        1. Jayshree Kamath says:

          Dear Kashu Patel,

          FYI,
          It is circular 92/2019,
          These circulars bind on the officers and not on the assessee,

          In your case, credit note could be issued as per D(iii) of the said circular.

  2. Jayshree Kamath says:

    In section 34(1) – The words “under Rule 53(1A) & 53(2)” shall be substituted with “Rule 53(1A)”,
    Rule 53(2) talks about Revised Tax invoices explained under point 3(A)(viii) above.

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