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CS Executive · Tax Laws and Practice · Procedural Compliance under GST

Under the CGST Act, 2017, a registered supplier has issued a tax invoice and later finds that the taxable value charged in it was higher than the actual taxable value of the supply. What may the supplier do?

The supplier may issue a credit note to the recipient. Section 34(1) permits a credit note when the taxable value or tax charged in the invoice exceeds the amount actually payable. A debit note or supplementary invoice applies only where the invoice understated value or tax.

  1. AIssue a credit note to the recipient containing the prescribed particularsCorrect
  2. BIssue a debit note to the recipient for the excess amount
  3. CCancel the invoice without issuing any document
  4. DIssue a supplementary invoice for the difference

Explanation

Section 34(1) allows a credit note where the taxable value or tax charged in the invoice exceeds what is actually payable, where goods are returned, or where supplies are deficient. A debit note or supplementary invoice is used when the invoice shows less than the correct value or tax, so those options are wrong.

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