/** * The main template file * * This is the most generic template file in a WordPress theme * and one of the two required files for a theme (the other being style.css). * It is used to display a page when nothing more specific matches a query. * E.g., it puts together the home page when no home.php file exists. * * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ * * @package WordPress * @subpackage Tally * @since 1.0.0 */ ?>
To begin with, one must fully unlearn the practices under the erstwhile law in order to clearly understand the concepts of credit note in GST. A credit note in GST can be issued by the registered person who has issued a tax invoice, i.e., the supplier.
A Tax Credit Note is a written or electronic document to be recorded and issued by a registered supplier of goods or services on the occurrence of situations as prescribed by the GST Act and Rules.
The GST Law provides an exhaustive list of situations under which the registered supplier is entitled to issue a credit note: Following are the situations which requires the supplier to issue a credit note.
Example -1 of Credit Note
Example: On 2nd Feb, '18, Johan & Co., a registrant in Mumbai, supplies 10 Monitors @ 10,000 each, to Noon Electronics, a registrant in Mumbai. 18% GST charged on the supply is 1,800. On the same day, Noor Electronics returns 1 monitor to Johan & Co., as it was found to be damaged in transit. In this case, Johan & Co should issue a credit note to Noon Electronics for the monitor returned and reverse the GST charged on the monitor. The Tax Credit Note to be issued by Johan & Co. is shown below.
Example -2 of Credit Note
When cash discount is allowed at the time of collecting payment from a customer in terms of an agreement entered into prior to the supply, then the supplier would issue a credit note to the customer to the extent of such cash discount, to declare that he ‘OWES’ money.
Then, the original amount due to MINUS the credit note is the revised value of supply that the customer pays the supplier. To this extent, the GST thereon would also stand reduced, subject to conditions.
The conditions applicable on an issue of credit note in GST are listed below:
Annual return has been filed for the FY in which the original tax invoice was issued; or
September of the financial year immediately succeeding the financial year in which the original tax invoice was issued.
(i.e., for a tax invoice issued in April 2018, as well as a tax invoice issued in March 2019, the relevant credit notes cannot be issued after September 2019);
The debit and credit note in GST shall contain the following details :
GST Credit Note Format
The supplier shall mention the details GST credit note in form GSTR-1. The details of the GST Credit Note should be mentioned in table 9B. The GST Credit Note details need to be mentioned separately for Registered and unregistered.
The following are details of GST Credit Note details issued registered business to be furnished in GSTR-1
In the case of Intra-State transaction:
In case the POS (place of supply) of the goods/ services is the same state as that of the supplier, the transaction is an Intra-State transaction. Notice, fields for Central Tax and State/UT Tax appear.
Note: The Amount in Tax fields are auto-populated based on the values entered in Taxable Value fields respectively. However, the taxpayer can edit the tax amount. The CESS field is not auto-populated and has to be entered by the taxpayer.
In GSTR 3B we don’t have a separate tile for disclosing the details of a credit note issued. Instead, it is dealt as a tax adjustment by way of deduction from Total taxable value and tax liability and only the net tax receipts are recorded in the tile ‘Details of outward supplies and inward supplies liable to reverse charge'.
Best Practices to Evaluate, Purchase and Implement Business Accounting Software