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Dr and cr note in itc effect

Ch.Venkata Ramana (commercial Manager) (138 Points)

29 August 2019

how to adjust Dr and Cr Note in ITC if received form vendor

outwards supply=sales + dr note - cr note

inwards supply =purchase + ? - ?

please explain

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2 Replies

ramesh (Student CA Final ) (82 Points)
Replied 29 August 2019

if entity purchase then DR and Cr Note are adusted as folloews
first entity booked whole purchase with corresponding GST input credit avialed as mentioned in vendor in invoice. after that entity find that due to shortage and rate difference in material as per our PO then dedit note issue crditing purchases a/c and input GST a/c and debiting the vendor same apply for sales

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Uttam (employee) (814 Points)
Replied 02 September 2019

You have reduce gst mentioned in the credit note received by you for purchases made earlier.

You have to add debit notes as you would have paid gst for such debit notes.

ITC = purchases + dr.notes received - cr. notes received.