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We should know about the process of creating debit notes, credit notes, and how to revise an invoice under GST. In this article, we will discuss the adjustment entry under the GST Act.
In the definition of outward supplies, invoices, credit notes, and debit notes have been included and same is applied to inward supplies.
Under the GST Act, every taxpayer will have to file tax returns and while submitting the tax returns, they need to file details of inward and outward supplies like sales, purchase, credit notes, and debit notes, so that you can claim input tax credit and determine your tax liability for a specific period.
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Under GST, all existing taxable dealers will have to apply for provisional registration through the migration process with the existing state /central government website. On the rollout date of the GST or after, all such taxpayers will have to complete the necessary formalities and after review by GST, all such taxpayers will get permanent registration certificate under GST.
All such taxpayers will have to revise their invoices from the date of implementation of GST to the date of issue of a GST Registration Certificate. The revised invoice under GST must be issued within 30 days from the date of issue of the registration certificate under the GST Act. The revision in the invoice with the GST number and HSN code / SAC will ensure proper credit of input tax and correct tax liability can be determined only with the proper migration of tax credit from the previous tax laws.
A supplementary invoice is issued by a taxable person to settle the difference in an invoice. There may be a case of excess or shortfall in the invoice value. To ensure that the actual invoice value matches with the earlier issued invoice, the supplementary invoices is to be issued, since it will further increase or decrease the value of the invoices.
As per GST law, the supplementary invoices should be issued within the time limit as prescribed by the GST Act. Supplementary Invoices can be issued in form of debit or credit note.
A credit note is also called a supplementary invoice under GST and a credit note is to be issued to reduce the value of taxable invoices.
Below we will discuss when you may need to issue credit note as a supplier of goods or services:
A debit note is also called a supplementary invoice under GST, and a debit note is to be issued to increase the value of an invoice under GST.
Circumstances when a supplier can issue a Debit Note:
The format of tax Invoices Prescribed under the GST can be seen from the following link-
Supply of Goods under GST Tax invoice format.
It may be noted that there is no provision of altering already filed returns in GST. Amendments may be made in the invoice by issuing supplementary invoice or credit or debit notes.
Read our article: Compliance Deadlines for Composition Taxpayers Relaxed
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