With the recent emphasis on GST, every taxpayer with a credit or debit card should know what credit notes in GST are. It might seem like a very complicated topic, but in reality, it is quite simple. All you need to know is what credit notes in GST are, how to issue them and when they are issued.
Once you know these three basic things, you will not have to worry about anything else. As already mentioned the procedure of issuing credit notes in GST is quite simple and can even be done online using pre-set modules that you simply have to fill up with your data. These websites will automatically do the difficult calculations for you so that you can rest easy.
How and When to Issue a Credit Note under GST?
A credit note under GST is typically issued by the supplies when the goods or services that were supplied are returned for some reason, or if there has to be a change in the value on the invoice, owing to the good being of a sub-par or low quality that is not up to the mark. Mainly, credit notes are issued in two situations. These two situations are described in more detail below for better understanding, and so that you can figure out when credit notes under GST are issued. Read on to find out what it is!
• When the amount of money owed by the customer to the seller increases, it is time for a credit note under GST to be issued. In some cases, the value of the invoice becomes greater. This can happen if extra goods are delivered or if the delivered goods are charged at an incorrect price. A debit note is issued by the seller first, informing the buyer. In return, the buyer issues a credit note, acknowledging the receipt of the debit note from the seller.
• When the amount of money owed by the customer to the seller decreases, the credit note is issued by the seller to the buyer. If for some reason, the goods are not up to the mark, or something similar happens, and the seller ends up owing money to the buyer, the buyer can issue a debit note to the seller indicating that they owe money to the buyer. In receipt of the debit note, the seller is required to issue a credit note so that proper records are maintained on both sides.
As you can see, the credit note under GST system is quite a straightforward process. In fact, it makes dealings between buyers and sellers much less complicated by making it easier to maintain financial records of the dealings. Issuing the notes is also very simple, as all that is required are a few details that you can fill up in online forms!