Vendors Credit Note My Debit Note Customer Vendor

Vendors Credit Note My Debit Note

Customer – Vendor ? • • Case 1 I am “Akito Kowa Packaging Ltd” I have Finsys ERP. I make Flexible Packaging in NCR Delhi My vendor is Uflex ( supplier of Flexible raw film) Case 2 I am a Washing Machine parts maker My Vendor sells Plastic Granule ( Raw Material)

What is a Credit Note ? Sec 2(37) CGST Act

Section 34(1) Credit Note. . PTO

Conditions in Section 34 • 34. (1) Where a tax invoice has been issued for supply of any goods or services or both and • the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or • where the goods supplied are returned by the recipient, or • where goods or services or both supplied are found to be deficient, • the registered person, who has supplied such goods or services or both, • may issue to the recipient a credit note • containing such particulars as may be prescribed.

Example # 1 : Rate excess problem • the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or ( excess charged was Rs 2 per kg on Film/Granules) – He charged Rs 110, 000 – Actual should have been Rs 1, 05, 000 – So, CN for Rs. 5, 000

Example # 2 • where the goods supplied are returned by the recipient, or – Akito Kowa has returned Rs 3000 of Raw Material due to defect/QC problem or anything • He charged Rs 20, 000 on the bill • I have to accept that bill in GSTR 2 – Later , I reject and send back the goods worth Rs 3000 • I cannot edit his bill • I cannot send him a debit note ( ? ? ) • So, request him for a CN for Rs 3, 000

Example # 3 • Goods in Transit loss / Short Supply by vendor • “…. where goods …. supplied are found to be deficient…”, • Uflex sent 15, 000 kg as per its bill. – But I received only 14, 600 kg. – So, Deficient by 400 kg. – He charged Rs 1, 50, 000 on the bill. – I have to accept that bill in GSTR 2. • But, I need to cover my loss. – I cannot send him a debit note ( ? ? ) – So, request him for a CN for 10 x 400 = Rs 4, 000.

Example # 4 : Service Provider • ISO 9001 Consultant. – Bill raised 2 lakhs. Filed on GSTR 1 – We pass the bill for Rs 175000. • “…. where …. services…. supplied are found to be deficient…”, • He charged Rs 2 lakhs on the bill. In GSTR-1 – I have to accept that bill in GSTR 2 A/ 2. • But, I need to cover my loss. – I cannot send him a debit note ( ? ? ) – So, request him for a CN for 25, 000

Who will make ? • the registered person, who has supplied such goods or services or both, • may issue to the recipient a credit note • containing such particulars as may be prescribed.

How to do in Finsys ?

Case 1 : Rate Difference 2/kg • Regd person ( Uflex ) will have to make the Credit Note • We will in Finsys post this in the 31 series debit note • This debit note is same as in Pre-GST period • It will hit your accounts but not hit – the GST portal – GST-3 B – GST-2

Why this is done ? • If we make the “ 58” series Debit Note • It will also load into the GSTN portal • And there will be a double Debit in GSTN Portal – He will give a credit note, and I approve it – If by mistake, I give a 58 series DN, then Modvat ITC will be adjusted twice • Hence, make We will in Finsys post this in the 31 series debit note