Debit & credit Notes -Issue & ITC

[Narendra Soni]

Dear Experts,

Kindly suggest :-

Whether Debit note & credit note can be issued by recipient of supplies OR can only be issued by Supplier only.

Whether ITC is available on both the Debit & Credit notes, and to whom ITC is available.

[KASTURI SETHI]

ITC is available on the strength of debit notes and credit notes. A registered who issues invoice can issue debit note and credit note.Any taxable person registered under GST is eligible to claim Input Tax Credit provided his final product is taxable or Zero-rated. If the taxable person supplies taxable and exempted goods and services, in that situation he is eligible for proportionate credit on taxable goods and services.

[Rajagopalan Ranganathan]

Sir,

Rule 8 of GST - TAX INVOICE, CREDIT AND DEBIT NOTES - Final Rules 18-5-2017 is not restricting issue of credit/debit notes only by supplier. Therefore it can be issued by the recipient of supplies.

Rule 1 (c) of GST - Input Tax Credit - Final Rules 18-5-2017 provides that the input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of a debit note issued by a supplier in accordance with the provisions of section 34. Therefore ITC can be availed on the basis of Debit note issued by the supplier. However these rules are yet to be lawfully notified.

[Ganeshan Kalyani]

A supplier has to adjust his accounts to the extent less goods received by the recipient. Say if supplier has sent material worth ₹ 100/- but buyer received only ₹ 98/- worth material then in this case buyer would should net amount. The supplier has to adjust his accounts to match the turnover of the supplier. Thus the supplier has to issued credit note by which his accounts will get adjusted. Thanks.

[MUKUND THAKKAR]

Agree with view express by All expert..

[Narendra Soni]

Thanks all experts.

AI Summary

Debit and credit notes: recipients may issue notes and Input Tax Credit is claimable subject to supplier documentation.
The GST invoicing rules do not expressly limit issuance of debit or credit notes to suppliers, and recipients may issue such notes; accounting practice requires suppliers to issue credit notes to reconcile shortages or value adjustments. Input Tax Credit is claimable on the basis of debit and credit notes subject to registration and documentary conditions, with proportionate credit where supplies include exempt and taxable elements; one view emphasises that ITC is availed on the basis of supplier-issued debit notes under the statutory scheme, noting the relevant rules were not yet notified.