Debit Notes in GST is an altogether different concept from the earlier practices. Under the GST Law, the debit note or a supplementary invoice is a convenient and legal method by which the value of the goods or services in the original tax invoice can be enhanced.
As per GST Law, a supplier of goods or services or both is mandatorily required to issue a tax invoice. Sometimes, there could be situations where the supplier want to increase or to make addition in the tax invoice by the following reasons :
1. The Supplier has declared value which is less than the actual value of the goods or services or both provided.
2. The Supplier has declared a lower tax rate than what is applicable for the kind of the goods or services or both supplied.
3. The quantity received by the recipient (buyer) is more than what has been declared in the tax invoice.
4. Any other similar reasons.
In order to cover these kinds of situations the supplier is allowed to issue a Debit Note to the recipient (buyer). The debit note also includes supplementary invoice.
Note : When the movement of goods is involved, the debit note could not be issued. i.e. The debit note can not be taken as a mean of purchase returns.
There is no prescribed format but debit note issued by a supplier must contain the following particulars, namely:
When the supplier issues debit note or a supplementary invoice, it creates additional tax liability. The treatment of a debit note or a supplementary invoice would be identical to the treatment of a tax invoice as far as returns and payment are concerned.
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