Credit Note u/s 34

[sunil jain]

As per section 34(2) of CGST Act, any registered person who issues Credit Note(CN), shall declare the details of such CN in the return for the month during which CN has been issued but not later than September following the end of the FY in which supply was made.

Say if supply of good was made in March 2018, and goods are returned back in October, does it mean CN can not be issued in Oct or so?

Pl clarify.

Thanks,

CA. R.K. Aggarwal

[DR.MARIAPPAN GOVINDARAJAN]

As per the provisions of law it is yes. But some clarifications have to be issued in this regard by GST Council because of difficulties in actual practice. You may refer your problem to the GST council. The GST Council may take care of this.

[Ganeshan Kalyani]

You cannot take benefit of the credit note of invoices pertaining to previous year after filing of return for the month of Sept.

[KASTURI SETHI]

You should not suffer because of 'time factor'. Matter should be raised before GST Council as advised by Dr.Govindarajan, Sir. Path is tough but problem will be solved not only for you but for others also.

[Ganeshan Kalyani]

In erstwhile law, the VAT credit on the sales credit was restricted to six months time. If sales return happens after six months from sale date then vat was not allowed to be reversed. In some state it was one year. Since GST is consolidaicon of erstwhile law then I doubt that GST Council will allow to take benefit on the sales return after September month of subsequent financial year.

[KASTURI SETHI]

There is legal force in the views Sh.Ganeshan Kalyani Ji. What I want to say voice should be raised before GST Council on the ground that there must be no restriction of time factor for sales return. Supplied goods should be allowed to return directly or indirectly at any time.

[CASusheel Gupta]

You can ask your customer to send the goods on Tax Invoice instead of on delivery challan and issue of credit note.

AI Summary

Credit note time-bar under GST: late-issued credit notes cannot adjust prior-year output tax unless Council provides relief. Section 34(2) requires credit notes to be declared in the return for the month issued and not later than the September return following the financial year of supply; credit notes arising from goods returned after that cutoff cannot adjust output tax for the earlier supply period unless the GST Council provides clarificatory relief. Commentators observe this mirrors legacy time limits and suggest policy appeal to the Council or using alternative invoicing for returned goods.