Section 34 of GST – Credit and debit notes. Everything you want to know about for GST Section 34, this section is provide all details for Credit and debit notes. Detailed Analysis of GST Section 34 of GST Model Law –Credit and debit notes. Everything you want to know about GST all Sections. This Act may be called the CGST Act, 2017.
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Section 34 of GST – Credit and debit notes
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(1) Where one or more tax invoices have1 been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient one or more credit notes for supplies made in a financial year2 containing such particulars as may be prescribed.
(2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
(3) Where one or more tax invoices have3 been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient one or more debit notes for supplies made in a financial year 4containing such particulars as may be prescribed.
(4) Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted such manner as may be prescribed.
Explanation. – For the purposes of this Act, the expression ‘’debit note’’ shall include a supplementary invoice.
Related provisions of the Statute
| Section or Rule | Description |
| Section 2(37) | Definition of Credit note |
| Section 2(38) | Definition of Debit note |
| Rule 53 | Revised tax invoice and credit or debit notes |
| Section 15 | Value of taxable supply |
| Section 31 | Tax invoice |
| Section 74 | Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts. |
| Section 129 | Detention, seizure and release of goods and conveyances in transit |
| Section 130 | Confiscation of goods or conveyances and levy of penalty. |
Introduction
To begin with, one must fully unlearn the practices under the erstwhile law in order to clearly understand the concepts of credit note and debit note under the GST Law. A credit note or a debit note, for the purpose of the GST Law, can be issued by the registered person who has issued a tax invoice, i.e., the supplier. Any such document, by whatever name called, when issued by the recipient to the registered supplier, is not a document recognized under the GST Law. Section 34(1) & (2) of the Act deals with Credit Note and Section 34(3) & 34(4) deals with Debit note.
Frequently Asked Questions
Can credit notes/debit notes be raised without raising an appropriate tax invoice?
No, credit notes/debit notes have to be raised with reference to specific invoice and not otherwise to get the benefit of tax adjustment.
Is it mandatory to show the details of credit/debit notes in the periodic returns?
Yes, the details of debit note and credit note is required to be mentioned in periodic returns. If not shown, it is not considered for adjustment of tax liability.
Are there any situations where credit note cannot be issued?
Amongst others, a credit note cannot be issued if the incidence of tax and interest on such supply has been passed by tax payer to any other person.
Can a supplier who has wrongly charged tax at 18% instead of 12% subsequently issue a credit note only to the extent of the excess tax charged?
Yes, a credit note can be issued only towards the excess tax charged in an invoice.
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