In earlier articles, we’ve covered various aspects of Goods And Services Tax, how to create a GST invoice and finally how to file GST Returns.
Now, once you file the returns, it becomes little tricky to make changes to the transactions of that particular month – specially Invoices.
But we are humans and changes are bound to happen. So, in this article, we are going to cover how to revise invoice under GST regime. Learn about supplementary invoices and how to use them.
GST has fundamentally changed lot of processes around taxation. It has a focus to have a free flow of input tax credit to the recipient, with monthly reporting of each and every invoice issued for a transaction. The situation is such that any inadvertent omission of an invoice from the monthly return shall lead to truncation of credit.
Hence, invoices are a critical part of the GST ecosystem and cover a number of important aspects like date, HSN/SAC Codes, IGST, CGST, SGST amounts, the taxable value of the goods or services, etc. All these data have to be fed into the returns on a monthly basis to determine the amount of tax payable or credit to be availed.
How to revise a tax invoice in GST?
There may be a situation where an invoice has been wrongly issued, or there are certain changes that are required in an already issued invoice. Such situations call for a rectification of invoices. All such rectification has to be reported accordingly in the monthly returns.
Revision of tax invoices can take place in a number of ways. There can be a downward or an upward revision in prices of goods or services being supplied, or there can be a change the in the rate of tax of GST or many other cases.
These cases render a change in the issued invoice. An upward revision can be catered to with a supplementary invoice. Similarly, a downward revision can be catered to using a credit note to that effect. In some cases, there can be a complete revision in the invoice; hence, a “revised” invoice has to be issued.
However, revised invoices have not been defined separately in the GST law as of now. Currently, all registered taxable person have been granted a provisional GSTN ID Number. After completion of requisite formalities, all such persons shall be provided a formal registration number under GST.
All invoices raised between the date from which GST is applicable and the date on which they get the formal GST ID number, such taxable registered person shall be required to issue a “revised” invoice. This invoice shall be in adherence to the terms of GST and has to be issued within 1 month from the receipt of original registration certificate.
It is obvious from the above that a registered taxable person cannot issue a revised invoice after receipt of registration certificate.
Supplementary invoices and its uses
A supplementary invoice makes good all deficiencies related to an original tax invoice under GST. There can be some situations where taxable value of the goods or services has been undermined in the original tax invoice, resulting in lesser amount of tax being charged or other such deficiencies.
In these cases, the supplier can issue a supplementary invoice to accommodate such incremental changes. It also includes debit and credit notes. Hence, any upward revision or downward revision can be taken care of in a supplementary invoice.
Apart from taking care of such changes, there are a certain number of particulars to be mandatorily mentioned in the invoice. There is no pre-defined format mandated by the GST law, but these pointers must be a part of the same in the paper or digital document. The particulars are as follows:
- Name and address of the supplier
- GSTIN of the supplier
- Nature of invoice, i.e. “Debit Note,” “Credit Note,” “Revised Invoice” or “Supplementary Invoice.” It has to be mentioned in bold to display the nature of the invoice.
- An alpha-numeric serial number for the invoice, specific to an accounting year
- The invoice date
- Name and address of the recipient
- GSTIN of the recipient
- Where a recipient is an unregistered person, then name and address of place of delivery, along with its respective State and code, of such person has to be mentioned
- The original invoice serial number against which the supplementary invoice is being issued
- The differential amount of tax, taxable value of the goods or services or rate of tax
- Signature of authorized person in case of physical document, or digital signature in case of electronic invoice.
With the help of this supplementary invoice, it can only be possible for the recipient to claim additional input tax credit.
Adjusting using Credit Note
According to Model GST law, section 2(35) read with section 24(1), a taxable person can issue a credit note when a tax invoice is issued for supplying goods and services, and the tax charged on that invoice exceeds the tax payable on such supply. A credit note should contain the prescribed particulars.
A credit note has to be issued:
- If a taxable person who had issued a tax invoice for receiving goods and services.
- When tax invoice charges a value more than tax payable
- With prescribed particulars.
Hence, credit note acts as an accounting adjustment which settles the exact amounts of value and tax.
Also read about Credit Notes & Debit Notes.
Difference between revised and supplementary invoice
The basic difference is inherent in the absolute meaning of the documents. The revised invoice can only be issued with respect to any invoice issued by the supplier, whereas in case of supplementary invoice, it can only be issued to make good any deficiency in an already issued original tax invoice.
A registered taxable person can only issue revised invoices to a registered taxable person. However, a registered taxable person can issue a supplementary invoice to a registered or unregistered person.
Revised invoice is restricted to a period between registration date and date of receipt of registration certificate. The supplementary invoice can be issued based on an invoice on as-is basis.
Difference between Debit Note, Credit Note, and Revised Invoice
|Debit Note||Credit Note||Revised Invoice|
|It is sent when a buyer returns goods to the seller||It is given when a supplier receives returned goods from the buyer||It is issued when there is a discrepancy in the issued invoice|
|This shows a positive amount||This shows a negative amount||This may be positive or negative or may involve any other kind of changes apart from amount|
Sales Returns A/C – Debit
To Debtor’s A/C – Credit
Creditor’s A/C – Debit
To Goods Returned A/C – Credit
Sales Returns A/C – Debit
To Debtor’s A/C – Credit
Common Questions About Invoice Revision
1) Where a return has already been filed covering all the invoices, how can I revise the return or the invoice?
There is no concept of revision of returns under the GST regime. However, you can change the invoice through a supplementary invoice or debit or credit notes. It has to be ensured that details of such supplementary invoices have to be mentioned in the monthly returns, thereby changing the input tax credit eligibility to the recipient.
The change shall automatically reflect in GSTR-2 of the recipient in the next month, thereby updating the digital cash ledger of the recipient.
2) By what time do I have to issue a supplementary invoice?
The original invoice has to be revised or supplemented within a period of one month from the issuance date of original invoice.
3) Is there any time limit to the amount of taxable value of the goods or services, for which the supplementary invoice has to be updated in the returns?
All supplementary invoices have to be updated mandatorily on the GSTN portal through monthly returns. Where the supply is of inter-state in nature, and where the taxable value of the goods or services is less than two hundred and fifty thousand rupees, a consolidated invoice can be issued. Moreover, a statement of total sales made to end consumers can be made in the monthly returns.
4) What are the situations in which a supplementary invoice has to be raised?
There can be some situations wherein there can be a need of a supplementary invoice:
- Where the recipient rejects the goods because they are of inferior quality
- Where the rate of tax has changed
- Where the taxable value of the goods or services has changed
- Where there is a short receipt of materials by the recipient
- Where the supplier charges a refund to the supplier
5) I am a recipient of the goods, and I reject the same upon receipt. Will I able to raise a debit note?
As a normal accounting practice, it can be done. But it would have no effect under GST. All debit and credit notes raised by the supplier will have the necessary commercial impact. There has been no concept devised under GST for a debit note raised by the recipient.
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