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CA Final · Indirect Tax Laws · Miscellaneous Provisions (GST)

Under a contract entered into before the appointed day, Kapoor Engineering supplied machinery parts. After the appointed day, the contract price was revised upwards by Rs 40,000 on 10 August. Which action is required under the transitional provisions?

Kapoor Engineering must issue a supplementary invoice or debit note within thirty days of the upward price revision. That document is treated as issued for an outward supply under the GST Act. The credit note route applies only to downward revisions and is optional.

  1. AIssue a supplementary invoice or debit note within thirty days of the price revision, which is deemed to be issued for an outward supply under the GST ActCorrect
  2. BIssue a supplementary invoice at any time before the annual return is filed
  3. CNo document is needed, since the contract predates GST
  4. DIssue a credit note within thirty days, which is optional

Explanation

Section 142(2)(a) requires the registered person to issue a supplementary invoice or debit note within thirty days of an upward price revision under a pre-appointed-day contract, and it is deemed an outward supply under the GST Act. A credit note applies to downward revision and is optional, so the last option is wrong.

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