Skip to content

CA Final · Indirect Tax Laws · Tax Invoice, Credit and Debit Notes

Nair Enterprises, a registered person, was served a notice and paid tax under section 74 for a supply, and issues a debit note for the tax payable. Which statement about the debit note is correct under the CGST Rules?

The debit note must prominently carry the words "INPUT TAX CREDIT NOT ADMISSIBLE". Rule 53(3) requires this for any invoice or debit note issued for tax payable under section 74, section 129 or section 130, and it applies regardless of the amount involved.

  1. AIt must prominently contain the words "INPUT TAX CREDIT NOT ADMISSIBLE"Correct
  2. BIt must prominently contain the words "Revised Invoice"
  3. CIt need not carry any special words, as only invoices need them
  4. DIt must carry the words "INPUT TAX CREDIT NOT ADMISSIBLE" only if tax paid exceeds Rs 2,50,000

Explanation

Rule 53(3) says any invoice or debit note issued for tax payable under section 74, section 129 or section 130 shall prominently contain the words "INPUT TAX CREDIT NOT ADMISSIBLE". No value threshold exists. The words "Revised Invoice" relate to revised tax invoices only.

Did you get it right without looking?

One question tells you little. A timed set on Tax Invoice, Credit and Debit Notes shows your real accuracy, how long you take and where you lose marks.

Practise Tax Invoice, Credit and Debit NotesFree diagnostic mock

More Tax Invoice, Credit and Debit Notes questions