Dear Experts,
Party A had received goods on 15th Sep 2025 at rate of 12% however thereafter GST Rate was increased to 18%. Now, Party A wants to return the goods. My query is:
a) What rate should be charged on credit note-12% or 18%
b) Legal citation/provision which specifically addresses this situation
The doubt arises because if the return is treated as a new supply then rate applicable on return date should be charged. However, on flip side, supplier earlier paid 12% GST on o/w supply then how we can claim back 18% GST from govt via credit note. Kindly shed some clarity.
Credit note must mirror original GST rate (12%), supplier may not recover increased 18% rate via credit note A credit note is linked to the original tax invoice, so the GST adjustment on return should mirror the original transaction rate (12%), not the subsequently increased rate. Therefore the supplier should issue a credit note reducing taxable value and tax charged at 12%; the supplier cannot recover 18% from the government via a credit note. An alternative view treats the returned goods as a fresh supply subject to the rate in force at that later date, but the prevailing interpretation and statutory mechanism for credit notes support applying the original invoice rate. (AI Summary)
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