Sec 2(37) – Credit Note

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Sec 2(37) – Credit Note 2017-04-14T02:59:25+00:00
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    #1171 |

    “credit note” means a document issued by a registered person under sub-section (1) of section 34;

    Priya MadrechaPriya Madrecha
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    A credit note can be issued by a supplier only in the following circumstances:
    (a)    The taxable value shown in the invoice exceeds the taxable value of the supply;
    (b)    The tax charged in the invoice exceeds the tax payable on the supply;
    (c)    The goods supplied are returned by the recipient; (d)     The goods/ services are found to be deficient.
    The following aspects need to be noted:
    •    Where there is no change in the taxable value/ tax amount, a credit note need not be issued unlike existing business practices;
    •    A credit note has to be issued by the supplier. A credit note issued by a recipient, say for accounting purposes, is not a relevant document for GST purposes;
    •    Once a credit note is issued, the details of the credit note should be declared by the supplier in the return of the month of the issue of credit note. However, if not declared in that month, it can be declared in any return prior to September of the year following the year in which the original tax invoice was issued (or filing of annual return, whichever is earlier);
    •    The supplier will not be permitted to claim reduction in the output tax liability if the incidence of tax and interest has been passed on to any person, or if the recipient fails to declare the details of the credit note in his returns;
    •    The issuance of credit note would not be relevant if the recipient treats the return of goods as an outward supply and raises a tax invoice in this regard.

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