Question4:
A chartered Accountant raised an Invoice on his client for Rs. 1,00,000/- with a IGST of Rs. 18,000/-, for a total value of Rs 1,18,000/-. The client says that a bill is raised for higher fees and agrees to pay only 80,000/- plus IGST only. Now the question arises whether;
• a Debit note can be raised by client.
• or Credit note to be raised by Chartered Accountant.
• Or anyone can raise Debit or Credit Note accordingly.
Kindly advise us the resolution of the Query.
Answer:
Section 34 of CGST Act contains the relevant provisions Section 34: Credit and debit notes. (Relevant Rules 53 to 54)
(1) 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 exceed
the taxable value or tax payable in respect of such supply, or where the goods
supplied are returned by the recipient, or where goods or services or both
supplied are found to be deficient, the registered person, who has supplied such
goods or services or both, may issue to the recipient a credit note containing
such particulars as may be prescribed.
(2) Any registered person who issues a credit note in relation to a supply of
goods or services or both shall declare the details of such credit note in the
return for the month during which such credit note has been issued but not later
than September following the end of the financial year in which such supply was
made, or the date of furnishing of the relevant annual return, whichever is
earlier, and the tax liability shall be adjusted in such manner as may be
prescribed: Provided that no reduction in output tax liability of the supplier
shall be permitted, if the incidence of tax and interest on such supply has been
passed on to any other person.
(3) 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.
(4) 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.
Explanation. ''For the purposes of this Act, the expression 'debit note' shall include a supplementary invoice. As per section 34 it is the supplier who will issue debit note or credit note therefore you have to issue credit note to the client. The GST act nowhere stop the receiver to issue debit note or credit note but the debit/credit note issued by the receiver will be recorded in financial accounts if desired but not be taken in GST returns and liability
(Reply dt. 17/11/2017)