DEBIT NOTE UNDER GST
Generally Debit Note use to raise for any amount receivable it may be Taxable or Not Taxable.
Debit Note for any kind of reimbursement or Debit Note any kind of Sales or Purchase Invoice
Correction
This document will help you to understand the the various concept of Debit Note under GST
1- Debit Note for Purchase Return
2- Debit Note for Discount Received on Purchase
3- Debit Note for Correction against Sales Invoice for any addition amount to be recovered from
customer such as Transport amount, Rate Difference Account etc (Debit Note against Sales)
Before Proceeding Entry level I would like to update that Debit Note against any Purchase will be Part
of GSTR2 where as Debit Note against any Sales will be Part of GSTR1
In case of Debit Note against any sales will go to GSTR1 Report Table wise summary Point 4 or Point
5
What is Point 4 ?
This include all Credit Note/Debit Note raised in case of B2B Transaction only
What is Point 5 ?
This include all Credit Note/Debit Note raised in Case of B2C (Interstate) where original invoice value
was above Rs 2.5 Lakhs
In case of Debit Note\Credit Note of B2C (Interstate or Intrastate) having original invoice value below
2.5 lakhs it will be directly subtracted from Point 3
1- Debit Note for Purchase Return
Some time goods purchase with GST need to be return for any fault or other reason hence we used to
raise Debit Note against Purchase Invoice
(Please Note that one debit note against one Invoice)
(One debit Note can not be used against multiple Invoice in Tally)
Example : Purchase Goods 100Qty@100Each @18% GST on 1st July
Out of above Purchase 10 Qty Returned for any reason Pass Debit Note
Gateway of Tally>>Accounting Voucher>>CTL+F9 Debit Note>>Item Invoice mode
Provide the details under GST details such Nature/Document No/Date of Supplier
(It will hit in GSTR 2 Point No 7)
2- Debit Note for Discount Received on Purchase
Some time discount on Purchase received for lump-sum value it will be treated as Inclusive of GST
amount
Let us continue with Same Example Purchase worth Rs 1,18,000 (Including Tax 18000)
We received any discount for Rs 11800 then this 11800 Rs can be treated as Including GST amount
depending upon Credit Note raised by Supplier
If supplier raised credit Note with GST it means supplier intend to decrease Tax liability and we have
to decrease our Input Tax Credit on Purchase as well
(This debit note is to decrease payable amount and not return of goods so pass below entry)
Option A : (Pass entry in Account Invoice mode or Voucher Mode)
As we are getting discount so it will decrease our Purchase value so we can pass the entry by
following way
Before Passing entry Press F12>>Enable the option for Modification of GST
Fill the details shown as above
While Passing this entry as soon as you will select your Purchase ledger
A pop-up box will appear select below option
(If box appear on your screen does not look like this then Press F12 at same page and enable all the
option)
Before saving this entry one more message box will appear like this
Click on Override option (Press O)
Now check GSTR2 Point 7 Table wise summary
OR
We can Process same entry in Item Invoice mode as well
Select Stock Item but do not mention any quantity
Option B : If we select Discount Received Ledger instead of Purchase ledger
As we all know Discount Received is an Income Part but if we select Income then Tally will not show
the accurate report under GSTR2 as it should be subtracted from GSTR2 hence you need to keep your
ledger either under Purchase Account or Indirect Exp
ENTRY
Mention all details as above (While passing entry please select against reference)
3. Debit Note against Sales (For Correction of Invoice such Transport Charge\Freight
Charges\Rate Difference)
Sometime While making sales Invoice we forgot to add some kind off charges such as
courier/transport/freight/Rate difference amount hence we raised Debit Note against sales Invoice to
tackle such case pass below entry
Option A : Raising Debit Note for any charges to be collected
One thing we should understand that Charges to be collected from customer is actually our income.
Example : To deliver some order we hire a truck from Factory location to Buyers or consignee
location for which Transporter raise bill on us not on buyer as we have hired Transporter. In this case
Transport Charges Paid on that is Independent exp and Transport Charges Collected on Invoice is
composite Supply Income hence It is better to create 2 different ledger for Transport Charges Exp
& Transport Charges on Sales
Entry : Sales Entry
ENTRY : Debit Note for Additional Charges
Option B : Rate Difference
Some time It happens that Product price was 1000 Rs but we charged only 900 hence for
100 Rs we need to raise Debit Note
(Pass Debit Note in Voucher mode press CTL+V)
Dr your Party mention total amount including Tax 11800 DR against Bill Cr Sales Ledger
Do not mention any Quantity just total amount of difference
CR CGST\SGST OR IGST Ledger
AND SELECT Appropriate option under GST Derails
At time of saving entry If any override message option arise then click on “O” to save the entry
In above case we selected stock item if you do not wish to select stock item or sales ledger you can
create a Rate difference ledger under Income and pass the entry directly in Account Invoice mode
Important Point to Note
1-Ledger under Indirect Exp will affect your GSTR2 report where as Ledger under Income will affect
your GSTR1
2- Debit Note against any Purchase will include ledgers which are under Indirect expenses/direct
Exp/Purchase Account including Round off ledger (Default behavior of Tally)
3- Debit Note against any Sales should contain primary ledger under Income/SALES including Round
off Ledger (As default behavior of Tally)
4- There are lot of problem that due to Round of ledgers entries are not reflecting under GSTR Report.
Hence create 2 Round off ledger Round off on sales and Round off on Purchase
5- Tally Accept Single debit note against single Sales or Purchase Invoice
Incase of any queries, please call us on 022-40864086 or mail us at gst@antraweb.com.
Watch GST related videos and documents on www.tallyhelp.com
CREDIT NOTE UNDER GST
Generally Credit Note use to raise for any amount payable it may be Taxable or Not Taxable.
Credit Note can be used in multiple scenario under GST we will discuss few of them
1- Credit Note for Sales Return
2- Credit Note for Discount on sales
3- Credit Note for any Rate difference against Purchase
4- Credit Note against Purchase for any additional charges Payable to Supplier
1- Credit Note for Sale Return (Item Wise)
If Some or Full Quantity sold got rejected and rerun then we can pass entry for stock item cas below
Select Appropriate option under GST details and select your bill refence as against refrence
Credit Note for Sale Return (without Item Wise)
2- Credit Note for Discount on sales (Item Wise)
Discount given on sales generally to decrease value of amount to be recivebale hence we can pass the
entry any of the following way
Do not mention any stock item Quantity Just select stock and value with GST
OR
Credit Note for Discount on sales (Without Item Wise)
You can create Discount given ledger but ledger should be under Sales\Income group and just
enable the GST and do not mention any further details under Set alter GST details
3- Credit Note for any Rate difference against Purchase
Some time we book Purchase with lower rate of amount of product later on Suplier send debit note for
higher rate of item for which we need to pass Credit Note for the same
ITEM WISE
(Entry Should be in Voucher Mode)
You can select either your purchase ledger or your Rate difference ledger (grouped under Purchase
account or expense)
As soon as you will select purchase ledger
Select Stock Item and value
Please select the below option in Tax Classification Box
WITHOUT ITEM WISE
SAME AS BOVE ENTRY DO NOT SELECT ANY ITEM
4- Credit Note against Purchase for any additional charges Payable to Supplier
Some time supplier miss to add some charges on Invoice such as Transport\Courier\other charges
hence he raise Debit Note for the same and we need to book as Credit Note for it
Charges ledger should under Purchase or Expense Group or else report will not be affected
IMPORTANT POINT TO NOTE
1-Ledger under Indirect Exp will affect your GSTR2 report where as Ledger under Income will affect
your GSTR1
2- Debit Note against any Purchase will include ledgers which are under Indirect expenses/direct
Exp/Purchase Account including Round off ledger (Default behavior of Tally)
3- Debit Note against any Sales should contain primary ledger under Income/SALES including Round
off Ledger (As default behavior of Tally)
4- There are lot of problem that due to Round of ledgers entries are not reflecting under GSTR Report.
Hence create 2 Round off ledger Round off on sales and Round off on Purchase
5- Tally Accept Single debit note/Credit Note against single Sales or Purchase Invoice
Incase of any queries, please call us on 022-40864086 or mail us at gst@antraweb.com.
Watch GST related videos and documents on www.tallyhelp.com
