Credit Note as per section 34 of CGST 2017

[SARAVANAN RENGACHARY]

Hi,

Customer has deducted 2% on total invoice value towards late supply (Liquidity Damage). Can we issue Credit Note and adjust the tax liability.

regards

saravanan.

AI Summary

Clarification Sought on Issuing Credit Notes for 2% Deduction Due to Late Supply under CGST Act, 2017 Section 34(1) A user inquired whether a credit note could be issued and tax liability adjusted for a 2% deduction by a customer due to late supply under the CGST Act, 2017. One response indicated that Section 34(1) might not directly cover this situation but suggested it could fall under 'deficient supply.' Another response clarified that the supplier must issue credit or debit notes, while a third response advised that the customer should raise a debit note for the deduction, referencing item 5e of Schedule II of the CGST Act.