Debit note to Supplier if Credit note not issued by Supplier

[Prem Choudhary]

Dear Expert

We have faces the issue for reversal of ITC in case of payment is not made to Supplier within 180 days of invoices and it is very painful to trace every month. The reason of hold amount may be diff. reason but major reason is quality of materials. and also the aging of vendor is increasing and vendor reconciliation is always open.

we have follow-up with the supplier but they are not issuing Credit Note.

please advice on above case how it is dealt with-

[DR.MARIAPPAN GOVINDARAJAN]

You may issue debit note.

[Prem Choudhary]

Sir with or without GST..

[DR.MARIAPPAN GOVINDARAJAN]

With GST

[Ganeshan Kalyani]

As per Section 34 of CGST Act, 2017 a supplier has to issued Credit Note or Debit Note as the case may be. However, a buyer can issue debit note with the reference of credit note issued by the supplier.

AI Summary

Debit note issuance can be used to address input tax credit reversal when suppliers refuse to issue credit notes.
Buyer faces input tax credit reversal risk where payments to suppliers remain unpaid and suppliers refuse to issue credit notes. Forum advice indicates the buyer may issue a debit note with GST to manage the position, and reiterates that suppliers are obliged under the GST framework to issue credit or debit notes, while buyers may issue debit notes to assist GST compliance and vendor reconciliation when suppliers do not provide credit notes.