January 9, 2023

What is Credit Note in GST?

Credit note in GST is characterised under area 34(1) of the CGST act 2017. It is a record issued by the supplier of goods or services to the recipient where –

1. a tax invoice has been issued for any supply of goods or services or both and:

2. The taxable value or tax charged in the invoice surpasses the taxable value or expense payable in regard to such stockpile

3. The merchandise provided is returned by the beneficiary

4. Good and services provided are viewed as lacking

5. In the occasion of any of the above cases, the enrolled provider of labor and products might give a credit note to the beneficiary.

When Credit Note is Issued?

At the point when an enrolled individual supplies goods or services, he wants to essentially give an expense receipt. After giving the duty receipt, an enlisted provider is expected to give a credit note to the beneficiary. Consequently, the provider gives a credit note in case of any of the accompanying cases:

1. the provider charges the value of goods or services in the receipt that is more than the genuine worth of such  goods or services

2. provider charges a higher pace of expense than what is pertinent to  goods or services provided

3. the number of goods or services got by the beneficiary is not as much as what has been announced in the first duty receipt

4. nature of goods or services provided to the beneficiary isn't sufficient. Subsequently, requiring the provider to repay the fractional or aggregate sum of the receipt.

5. some other reasons

Credit Note Format

There is no recommended organization to set up a credit note. Nonetheless, a credit note gave by a provider to the beneficiary high priority the accompanying specifics:

1. name, address andGoods and Services Tax Identification Number (GSTIN) of the provider

2. nature of the archive (credit note or charge note)

3. a sequential chronic number that is remarkable and ought to :

4. not surpass 16 characters,

5. be in one or numerous series,

6. contain letter sets, numerals or exceptional characters, for example, dash, run and so on

7. any blend thereof

8. date of issue

9. name, address and GSTIN of the beneficiary, whenever enrolled

10. in the event that the beneficiary is unregistered, then, at that point, name, address of the beneficiary and address of conveyance alongside name of state and its code should be given

11. chronic number and date of the comparing charge receipt or bill of supply by and large

12. worth of available stock of labor and products, pace of assessment and how much expense credited to the beneficiary

13. signature or computerized mark of the provider or any of his approved agents

How to Adjust Tax Liability in case of Credit Note

Time When Credit Note is Issued

Say a provider issues an acknowledgment note with respect to goods or services provided to the beneficiary. In such a case, he should proclaim the subtleties of such a credit note in the return for the month in which such a credit note is issued.

Be that as it may, such a statement ought not to be later than September following the finish of the monetary year during which such an inventory is made or when the significant yearly return is outfitted, whichever is prior to the two. This implies that when a credit note is issued after September, the result charge responsibility in such a case will not be diminished.


Pradhan Mantri Kaushal Kendra (PMKK)

Bill Of Supply under GST

The Importance Of Cost Accounting

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