DEBIT AND CREDIT NOTE

[VIRENDRA SINGH]

Dear Sir,

Please specify that CGST AND SGST OUTPUT OR INPUT will charged in rate diffrance credit note. When I am a seller.

[KASTURI SETHI]

If you recover differential amount on account of escalation prices (price increase retrospectively), you will have to pay GST. You should issue supplementary invoice. Debit Note also includes supplementary invoice. If you want to return inputs to the supplier, the supplier will issue credit note to you.He will reduce output liability. Being seller, first method is for you.

[VIRENDRA SINGH]

This mean a seller never charge input liability in rate difference credit note?

[VIRENDRA SINGH]

He will always reduce output liability in credit note.

[YAGAY andSUN]

In the Advance Ruling in the matter of M/s. Ultra tech Cement Limited (AAR Maharashtra) Advance Ruling NO.GST-ARA-34/2017-18/B-56 = 2018 (7) TMI 1761 - AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA, the amount paid to the Dealer towards “rate difference” and “special discount” as mentioned above, post supply are not complying with the requirements of section 15(3)(b)(i) of the CGST Act and therefore cannot be considered and allowed as discount for the purpose of arriving at the ‘transaction value’ in terms of Section 15 of the CGST Act. In such scenarios, applicable tax under the provision of GST needs to charged and paid accordingly.

[Ganeshan Kalyani]

The supplier always reduces his output GST while issuing credit note. He cannot impact his input tax credit. In order to issue credit note with GST certain conditions as stated by the experts need to be taken care.

AI Summary

Post-supply rate difference: GST must be charged and supplier issues supplementary invoice; credit notes reduce supplier output tax. Where a supplier recovers a post supply differential amount, GST must be charged and documented by a supplementary invoice or debit note. A supplier's credit note reduces the supplier's output tax liability and does not automatically change the buyer's input tax credit. Post supply payments labeled as rate differences or special discounts do not qualify to reduce the transaction value and therefore require applicable GST to be charged.