TRADE DISCOUNT AFTER SALES / DEBIT NOTE / CREDIT NOTES

[SAFETAB LIFESCIENCE]

Respected Sirs,

We are receiving bills for Raw Materials supply from GST registered persons with GST charged bills.

After receipt at our end, we found some discrepancies in their GST bill such as Insurance, Freight and Price difference and short supply etc... Shall we raise Debit Note to our suppliers for the taxable value to be deducted + GST ???

We were informed that we do not have rights to raise Debit Note for the goods purchased by us and only the supplier of goods (seller) has to give Credit Note ONLY. Kindly clarify whether we can raise Debit Note or Only seller has to give Credit Note or both are allowed for our debits to be made.

Likewise, against our supplies (sales) made, we want to raise Credit Note on Trade Discount to our customers for prompt payments or early payments. This is after sales only and we have not mentioned any Trade Discount in our Tax Invoices. If we raise Credit Note, where GST to be added with Discount amount. If we add GST, party will make payment after deducting Discount+GST amount (that is Credit Note Value). If so, what we have to do in GST portal for GST on discount amount in GSTR-3B. Shall we take back that GST available in Credit Note as ITC. Whether we have to add GST on Discount amount and we can give Credit Note for Discount value only without GST.

AI Summary

Debit note issuance limited to supplier; recipient debit notes not valid for GST, credit notes adjust tax liability.
Section 34(3) confines debit note issuance to the supplier when taxable value or tax is understated; recipient issued debit notes lack GST relevance. Supplier issued debit notes must be reported in the return for the month of issue. Post sale trade discounts should be reflected by supplier credit notes with GST impact recorded in GSTR 1 and GSTR 3B so that output tax is reduced or input tax credit reversed accordingly. A separate query on ITC for factory repairs remains unanswered in the record.