In recent years, many fraudulent cases of claiming input tax credit (ITC) are brought to the no...
GST implementation will take some time, but 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.
GST is expected to roll out on 1st July 2017. 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.
|Particulars||Supplementary Invoice||Revised Invoice|
|Meaning||Supplementary invoice is to be issued to settle the excess or shortfall in earlier issued invoices than the actual invoice value of supply of goods or services. Merely this is an ongoing transaction in the form of a debit credit.||The revised invoice is just a simple process revised already issued invoice by a taxable person during the implementation phase of GST.|
|Period covered||It covers invoices not in a period. Though there is a time limit to issue the supplementary invoice.||From the rollout date of GST to the date of actual issuance of GST registration certificate.|
|Issued to Whom||It can be issued to both registered and unregistered purchaser. This is merely an accounting entry to settle the difference post issuance of invoices under GST.||It is can be issued only by a registered person under GST Act.|
|Occurrence||This is repetitive transaction under GST Act||Revised invoice is a non-repetitive transaction and it is only applicable during the implementation phase of GST.|
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.
Supply of Goods under GST Tax invoice format.