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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Procedural Compliance under GST

Which statement about the term 'debit note' under Section 34 of the CGST Act is correct?

A debit note includes a supplementary invoice. The Explanation to Section 34 says so expressly. It is issued by the supplier when the original invoice understates taxable value or tax, and it increases rather than reduces the liability.

  1. AIt excludes a supplementary invoice, which is a separate document
  2. BIt includes a supplementary invoiceCorrect
  3. CIt can be issued only by the recipient of supply
  4. DIt can be issued only to reduce the tax liability

Explanation

The Explanation to Section 34 states that for purposes of the Act the expression debit note includes a supplementary invoice. It is issued by the supplier where the invoice shows less taxable value or tax than payable, so it increases liability, not reduces it.

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