REGARDING CREDIT NOTE

[Guest]

What is the rule for credit note???suppose there in an invoice in the month of March'14 and the credit note raised in the month of april'14. should we adjust the credit note with vat output. What is the period for taking credit note...Can we adjust service credit note eith vat output

[YAGAY andSUN]

Due to the time gap you would not be able to adjust the tax in the same financial year however, in the subsequent year it may be done. Further, Service tax credit cannot be adjusted with VAT Output Tax as both are mutual exclusive legislature, i.e. one is under Central Government, the other is under State Government.

Regards,

SameerMalhotra- Consultant

(YAGAY and SUN) -Management, Business and Indirect Tax Consultants

AI Summary

Credit note timing: adjustments across financial years may be permitted, but service tax credit cannot be offset against VAT output. Where a credit note is raised after the invoice period, VAT adjustment may be precluded in the earlier financial year and may be taken in the subsequent year subject to compliance; service tax credit cannot be adjusted against VAT output because service tax and VAT operate under separate, mutually exclusive legislatures.