277. X  sold goods worth Rs 1 lac to Y on credit on 3rd September and issued an invoice showing tax collected 18,000. On 10th October, Y paid Rs 90, 000 along with tax thereon for which X issued a debit note and declared the details in his return for the period of October. Y however did not make any adjustments in his return and in the month of December when the data did not match. Discuss         

          As per section 34 of the Act, where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that 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 services or both, shall issue to the recipient a debit note containing such particulars as may be prescribed. Further, Any registered person who issues 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 for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.                                 

In the above question, since X has reduced his tax collected by 1800 ((100000-90,000)*18%) and Y has not made any changes in his return therefore, in December when matching process will be done, 1800  tax output liability will accrue to recipient Y.