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Tax invoice.

25 August 2021

hi, we sell goods to our distributors, at the month-end rate difference amount arises, the distributor gives us a tax invoice of that rate difference. my question is we need to create a credit note against that rate difference or take an input tax credit.

but I'm issuing a credit note to the distributor.

please tell me which one is correct.

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4 Replies

Rajendra Prasad (Employee Private) (1895 Points)
Replied 25 August 2021

You have to provide Credit Note to your Customer. Go through Section 34 of CGST Act.

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 25 August 2021

In both the condition the revenue in form of tax is neutral. But the correct way to issue credit note as prescribed in Section 34 of CGST Act.

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SUMIT BADYAL (709 Points)
Replied 27 August 2021

Ok thanks for the reply, one more thing we sell goods to a distributor and they use some quantity of goods as a sample purpose and end of the month they give details of the sample, in credit note, we can reduce tax liability or not. Because we paid gst on purchase and sale also.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 29 August 2021

Yes definitely can reduce your tax liability.

Notte : In GST in term of Section 34 it's the supplier who can issue credit/debit note , as on the basis of Credit Notes issued by supplier the Recepient need to reduce his ITC.

The Recepient can issue the Credit /debit note but only for accounting purposes as the reduction /Addition of ITC by Recepient in 3B can be done only on the basis of GSTR 1 filed by supplier.