Hello friends, greetings for the day in the current article we will discuss about debit note as per provisions of CGST Act and rules accordingly. As per 2(38) of CGST Act debit note means a document issued by registered person under 34(3).
As per 34(3) where a tax invoice has been issued for supply of any goods and service or both and the taxable value or tax charged in the tax invoice is found to be “Less” than the taxable value or tax payable in respect of such supply, the registered person who has supplied such goods or service or both, shall issue to the recipient a “Debit note” containing such particulars as may be prescribed.
As per 34(4) any registered person who issue a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return of the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.
A supplier of goods or services or both is required to issue a tax invoice. However, during the course of trade or commerce after the invoice has been issued there could be situations like:-
- Supplier declared a value which is less than the actual value of the goods or services or both provided.
- Supplier has wrongly declared a value less than the actual value of goods or services or both.
- The quantity received by the recipient is more than what has been declared in the tax invoice.
In order to mitigate these kinds of situations the supplier is allowed to issue debit note to the recipient. These debit notes also includes supplementary invoice.
There is no prescribed format for the debit note issued by the supplier but as per Rule 54 of CGST rules 2017 a “Debit note” must contain the following particulars namely :-
- name, address and Goods and Services Tax Identification Number of the supplier;
- nature of the document;
- a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year;
- date of issue;
- name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient;
- name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered;
- serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
- value of taxable supply of goods or services, rate of tax and the amount of the tax debited to the recipient; and
- signature or digital signature of the supplier or his authorized representative.
The issuance of a debit note or a supplementary invoice creates additional tax liability. The treatment would be identical to the treatment of a tax invoice as far as returns and payments are concerned.As per rule 54 a registered person having the same PAN and the state code as an Input service Distributor , may issue an invoice or as the case may be a credit or debit note to transfer the credit of common input services to Input service Distributor.
As per sec 36 of CGST Act, every registered person is required to keep and maintain books of accounts or other records in accordance with 35(1) shall retain them 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. So records of debit note and supplementary invoice has to be retained until the expiry of 72 months from the due date of furnishing the annual return for that year.
Checkout the Procedure of E- Filing Of Income Tax Return from here
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One Query please
If three goods are sold in one invoice attracting different tax rates e.g 5%, 12%, 18%. Invoice is issued with lower taxable value e.g
Item Tax rate Taxable Value Actual Value
1st 5% 100 120
2nd 12% 110 150
3rd 18% 120 170
Now Invoice is total short for Rs. 100 (120+150+170-100-110-120).
Query is What tax rate need to be charged for Rs. 100.
Can alternate solution be to issue saperate Debit note & charge respective tax rate?