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Debit/credit notes gst implication

Coolca (Others) (33 Points)

18 May 2019

Two questions:-

1- Suppose a credit note is issued to us by one of our suppliers for deficient quality of goods delivered. What are the GST implications for us for this credit note? How will we factor in with ITC? Will it reduce our ITC or increase our ITC?

2- I have issued a debit note too to the same supplier for deficient quality of goods delivered. How will this entry be factored and shown in the GST filing since we still do not have any provisions for filing GSTR2? Im guessing it cant be treated as an outward supply and shown in GSTR1?

Thanks.

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7 Replies

CA Shikha Sharma (Ceo) (3869 Points)
Replied 18 May 2019

yes you're correct

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Coolca (Others) (33 Points)
Replied 18 May 2019

Not sure if you understand the question. You havent answered my queries.

Nikhil Bhatia (Article) (309 Points)
Replied 18 May 2019

1. this will definitely reduce your ITC.
2. In gst, the effect of debit note and credit note will be consider only when these are issued by supplier and in this case, you (receipient) had issued debit note.
so in my opinion until and unless these notes are issued from supplier, you shouldn't make any change in gst return.

shailendra shukla (Bhopal) (1741 Points)
Replied 18 May 2019

you will reverse the amount of itc on the credit note that has been issued to you by your supplier....... you issued debit note for the same thing it's equavalent to the credit note issued by supplier, however in gst only supplier can issue credit note and he will show it in his return you just need to reverse the amount of itc , no disclosure required in your return for the debit note issued by you......

Padmanathan Kv (2127 Points)
Replied 18 May 2019

Agree with earlier replies. You need to reverse thr amount to tax in the credit note given to you by your supplier.

The debit note issued by you is only for accounting purpose and it will not be reflected anywhere in the returns. In GST law, only the credit/debit note issued by supplier is considered.

There just reverse the tax in 3B, no need to disclose in GSTR 1