Reversal of input tax credit required before supplier reduces output tax liability by credit note; pass-through of incidence disregarded. A supplier cannot reduce output tax liability via a credit note unless the input tax credit attributable to that credit note has been reversed by the ... Summary
Reversal of input tax credit required before supplier reduces output tax liability by credit note; pass-through of incidence disregarded.
A supplier cannot reduce output tax liability via a credit note unless the input tax credit attributable to that credit note has been reversed by the registered recipient who availed it. The previous condition tying reduction to non-passage of tax incidence to another person is removed, so reversal by the recipient is the operative requirement.
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