Delinking of Credit Note/Debit Note under GST
What if assessee has received credit note in respect of various invoice? Whether he can receive single credit note?
There are no restrictions on receiving single credit note against various invoice but under GST till now it was mandatory to prescribe original invoice number by the taxpayers while providing details of Credit note/ Debit note under GSTR-1 or under GSTR-6 and due to this if single credit note/debit note is received it will create hurdle for assessee while uploading the same. But now government has prescribed an amendment which will allow assessee to report single credit note or debit note issued in respect of multiple invoices and for determining type of supply, he will be provided with the option such as Regular supply, Supply to Special Economic Zone, or Supply in form of Deemed Export or Export. Further he will be required to indicate Place of Supply against each credit note or debit note which will help to determine whether it is intra-state supply or inter-state supply.
Whether assessee can issue credit note/debit note without showing taxable amount?
Whenever a credit note/debit note is issued it may be in respect of reduction/increase in tax liability or reduction/increase in overall value of supply. If the credit note/debit note is issued due to reduction in respect of tax liability then, yes it can be issued and, in such cases value of credit note/debit note will be reported as ‘Zero’. Only tax amount will be entered.
Illustration : Mr J has sold the goods to Mr. Y. At a time of supply Mr. J was not able to determine the type and rate applicable to such supply and therefore as per general rule he treated such supply as inter-state supply and 18% was charged as GST. After few months became aware of his tax liability through online consultancy obtained by him; he was liable to charge only 5%. Mr. J was confused as he has correctly charged the taxable value and only rate of tax was not correct. Whether he can issue credit note in respect of above transaction?
Yes, Mr. J can issue credit not in respect of transaction undertaken by him. While issuing credit not value of credit note/debit note will be reported as ‘Zero’. Only tax amount will be entered.
It shall also be noted that assessee while applying for refund can now report such credit notes or debit notes in statements (filed during filing the refund application) without mentioning the related invoice number.
Such a change will allow the assessee to manage the credit note/debit note system, this is one more step taken by government in respect of easse of compliance.