Section 31 of proposed Model GST Act states that credit or debit notes will be raised by the supplier who has supplied such goods and / or services. Thus in case where Vendor – supplier – has supplied material & debit note is raised by recipient for short supply or rejection where such debit note raised has to be reflected in monthly returns. This cannot be reflected in GSTR 1 under details of credit / debit notes as what is to be reflected under this section is debit/credit notes only if issued as supplier.
Neither this can be reflected in GSTR 2 under details of credit/debit notes as this is an auto populated section based on GSTR 1 filed by counter party.
Thus in my opinion unless the supplier – Vendor – raises credit note this cannot be relected in GSTR 1 or GSTR 2.
What would happen to debit note raised on which GST has been charged but not reflected in our return for non issuance of credit note by Vendor – supplier & GST not paid by us..
Sec.32 which talks about furnishing details of outward supplies . Explanation to section says that outward supplies shall include invoices , debit notes etc in relation to outward supplies.
Thus is purchase return to be treated as outward supply & reflected in GSTR 1 , which however seems incorrect as GSTR 1 should include debit notes raised as supplier.
Clarification should be given to sort out this case as Vendor – supplier – would not issue credit note immediately based on our debit note. Further for accounting also we would have to raise debit note on vendor in absence of which this would result in excess payment to vendor – supplier.