Credit note and debit note rules require issuing and declaring adjustments to correct overstated or understated tax invoices. Where a tax invoice overstates taxable value or tax, or goods are returned or deficient, the supplier may issue a credit note and must declare it in the return for the month of issue (subject to the latest filing limit) and adjust tax liability as prescribed; reduction in output tax is barred if tax incidence has been passed to another person. Conversely, where a tax invoice understates taxable value or tax, the supplier must issue a debit note (including a supplementary invoice), declare it in the return for the month of issue, and adjust tax liability as prescribed.
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Provisions expressly mentioned in the judgment/order text.
Credit note and debit note rules require issuing and declaring adjustments to correct overstated or understated tax invoices.
Where a tax invoice overstates taxable value or tax, or goods are returned or deficient, the supplier may issue a credit note and must declare it in the return for the month of issue (subject to the latest filing limit) and adjust tax liability as prescribed; reduction in output tax is barred if tax incidence has been passed to another person. Conversely, where a tax invoice understates taxable value or tax, the supplier must issue a debit note (including a supplementary invoice), declare it in the return for the month of issue, and adjust tax liability as prescribed.
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