Tax Invoice, Credit and Debit Notes – CA Inter Tax Study Material

Tax Invoice, Credit and Debit Notes – CA Inter Tax Study Material is designed strictly as per the latest syllabus and exam pattern.

Tax Invoice, Credit and Debit Notes – CA Inter Taxation Study Material

Question 1.
Examine the following independent cases of supply of goods and services and determine the time of issue of invoice under each of the cases as per the provisions of CGST Act, 2017 :
(i) Sakthi Enterprises, Kolkata entered into a contract with Suraj Enterprises, Surat for supply of goods on 3rd October, 2018. The goods were removed from the factory at Kolkata on 11th October, 2018. As per the agreement, the goods were to be delivered by 31st October, 2018. Suraj Enterprises has received the goods on 14th October, 2018.

(ii) Trust and Fun Ltd., an event management company, has provided its services for an event at Kapoor Film Agencies, Mumbai on 5th June, 2018. Payment for the event was made on 19th June, 2018. [May 2019, 4 Marks]
Answer:

	Case	Statutory provision	In the given case
(i)	Sakthi Enterprises	A registered person supplying taxable goods shall issue a tax invoice, before or at the time of removal of goods for sup­ply to the recipient, where the supply involves movement of goods.	The invoice has to be is­sued on or before, 11th October 2018 (the time of removal of goods).
(ii)	Trust and Fun Ltd.	A registered person [other than an insurer/banking company/financial institu­tion, including an NBFC] supplying taxable services shall issue a tax invoice be­fore or after the provision of service, but within a period of 30 days from the date of supply of service.	The invoice has to be issued within 30 days of 5th June 2018 (date of supply of service), ie. on or before, 5th July 2018.

Question 2.
Mr. Lakhan provides Continuous Supply of Services (CSS) to M/s. TNB Limited. He furnishes the following further information:  [Nov. 2018, 5 Marks]

(i)	Date of commencement of Providing CSS	01-10-2017
(ii)	Date of completion of Provision CSS	31-01-2018
(iii)	Date of receipt of payment by Mr. Lakhan	30-03-2018

Determine the time of issue of invoice as per provisions of CGST Act, 2017, in the following circumstances:

1. If no due date for payment is agreed upon by both under the contract of CSS.
2. If payment is linked to the completion of service.
3. If M/s. TNB Limited has to make payment on 25-03-2018 as per the contract between them.

Answer:

	Statutory provision	In the given case
(i)	Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment.	The invoice should be issued on or before 30-3-2018 (date of receipt of payment by Mr. Lakhan).
(ii)	If payment is linked to the com­pletion of an event, the invoice should be issued on or before the date of completion of that event.	The invoice should be issued on or before 31-10-2018 (date of completion of service).
(iii)	Where the due date of pay­ment is ascertainable from the contract, the invoice should be issued on or before the due date of payment.	If M/s. TNB Limited has to make payment on 25-3-2018 as per the contract between them, the invoice should be issued on or before 25-3-2018.

Question 3.
Jolla provides continuous supply of services regarding Annual Maintenance Contract, (AMC) of Air conditioner and all electronic items in Khotu Ltd. He provides following details regarding same:

They made contract for the AMC. As mentioned in contract AMC will be starts from 1-10-2017 and AMC is valid for a year. AMC ends on 30-09-2018. Jolla receives payment for the AMC on 31-10-2018.

Explain time of issue of invoice in Continuous Supply of Service (CSS) as per provisions of CGST Act, 2017 and accordingly determine time of issue of Invoice in following different circumstances :  [May 2019 Old Course, 4 Marks]

1. As mentioned in contract Khotu Ltd. have to make payment on 5-11 – 2018.
2. If terms of payment is not mentioned in AMC and also not agreed by both the parties.

Answer:

Statutory provision

In the given case

In case of continuous supply of services Where due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment. Where due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment Where payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.

The time of issue of invoice will be as follows in the given different circumstances:  If it is mentioned in contract that Khotu Ltd. has to make payment on 05-11 -2018, the invoice shall be issued on or before 05-11-2018. If terms of payment are not men­tioned in AMC and are also not agreed by both the parties, the invoice shall be issued on or before 31-10-2018.

Assumption:
The annual maintenance contract has been considered as continuous supply of service. However, as per section 2(33) of the CGST Act, 2017 “continuous supply of services” inter alia means a supply of services with periodic payment obligations.

Question 4.
Chidanand Products Pvt. Ltd. started its business of supply of goods on 1st August, 2017. It’s turnover exceeds ₹ 20,00,000 on 5th September, 2017. It applied for registration on 28th September, 2017 & granted registration certificate on 6th October, 2017. Guide the company regarding invoices to be issued between 5th September, 2017 to 6th October, 2017 to registered dealers. Further it had also made supplies to unregistered dealers in that period. How it can raise invoices? [May 2018 Old Course, 4 Marks]
Answer:

Statutory provision

In the given case

♦ A supplier whose aggregate turn­over in a financial year exceeds ₹ 20 lakh in a State/UT is liable to apply for registration within 30 days from the date of becoming liable to registration (i.e„ the date of crossing the threshold limit of ₹ 20 lakh) vide section 22 of CGST Act, 2017. ♦ Where the application is submitted within the said period, the effective date of registration is the date on which the person becomes liable to registration; otherwise it is the date of grant of registration. ♦ Every registered person who has been granted registration with effect from a date earlier than the date of issuance of registration cer­tificate to him, may issue revised tax invoices in respect of taxable supplies effected during this period within 1 month from the date of issuance of registration certificate.

For supplies between 5th September, 2017 to 6th October, 2017 to registered dealers. ♦ The Chidanand Products Pvt. Ltd. may issue revised tax invoices against the invoices already is­sued during the period between effective date of registration (5th September, 2017) and the date of issuance of registration certificate (6th October, 2017), within 1 month from 6th October, 2017. Supplies to unregistered dealers: ♦ The Company may issue a con­solidated revised tax invoice in respect of all taxable supplies made to unregistered dealers during such period. However, in case of inter-State supplies made to unregistered dealers, a consol­idated revised tax invoice cannot be issued if the value of a supply exceeds ₹ 2,50,000.

Question 4A.
Avtaar Enterprises, Kanpur started trading in Ayurvedic medicines from July 1, 20XX. Its turnover exceeded ₹ 20 lakh on October 3, 20XX. The firm applied for registration on October 31, 20XX and was issued registration certificate on November 5, 20XX.

Examine whether any revised invoice can be issued in the given scenario. If the answer to the first question is in affirmative, determine the period for which the revised invoices can be issued as also the last date upto I which the same can be issued.
Answer:
Statutory Provision:
(a) As per section 31(3)(a) of the CGST Act

• A registered person may
• within one month from the date of issuance of certificate of registration
• issue a revised invoice against the invoice already issued
• during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him.

(b) As per Rule 10(2) of CGST Rules

• the registration shall be effective
• from the date on which the person becomes liable to registration
• where the application for registration has been submitted
• within a period of 30 days from such date.

In the given cases:

• Avtaar Enterprises has applied for registration within 30 days of becoming liable for registration and the registration has been granted.
• Thus, the effective date of registration is the date on which Avtaar Enterprises became liable for registration i.e., October 3, 20XX.
• Therefore, since in the given case there is a time lag between the effective date of registration (October 3, 20XX) and the date of grant of certificate of registration (November 5,20XX), revised invoices can be issued.
• The same can be issued for supplies made during this intervening period i.e., for the period beginning with October 3, 20XX till November 5, 20XX.
• Further, the revised invoices can be issued for the said period till December 5, 20XX.

Question 5.
Determine with reason whether the following statements are true or false:
(i) A registered person shall issue a separate invoice for supplying both taxable as well as exempted goods to an unregistered person.
(ii) A Non-banking financial company can issue a consolidated tax invoice at the end of every month for the supply made during that month. [May 2018, 3 Marks]
Answer:

	The given statement is	Explanation
(i)	False	Where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single “invoice-cnm-bill of supply” may be issued for all such supplies.
(ii)	True	By virtue of an amendment, a non-banking financial company has been allowed to issue a consolidated tax invoice or any other document in lieu thereof for the supply of services made during a month at the end of the month.

Question 6.
List out the situations in which a Credit note/Debit note may be issued under the CGST Act, 2017. [May 18 Old Course, Nov. 2018 Old Course, May 2019, 5 Marks]
Answer:
CREDIT NOTE is required to be issued by the Supplier in the following situations

1. If taxable value charged in the tax invoice is found to exceed the taxable value in respect of supply of goods and/or services, or
2. If tax charged in the tax invoice is found to exceed the tax payable in respect of supply of goods and/or services, or
3. if goods supplied are returned by the recipient, or
4. if goods and/or services supplied are found to be deficient.

DEBIT NOTE is required to be issued by the Supplier in the following situations

1. if taxable value charged in the tax invoice is found to be less than the taxable value in respect of supply of goods and/or services or
2. if tax charged in the tax invoice is found to be less than the tax payable in respect of supply of goods and/or services

Question 7.
Kartik & Co., a registered supplier under GST, provides the following information regarding various tax invoices issued by it during the month of March 2019:

1. Value of supply charged in an invoice was ₹ 2,50,000 against actual taxable value of ₹ 2,30,000.
2. Tax Charged in an Invoice was ₹ 32,000 against the actual tax liability of ₹ 68,000 due to wrong HSN code being chosen while issuing invoice.
3. Value charged in an Invoice was ₹ 3,20,000 as against the actual value of ₹ 4,20,000 due to wrong quantity considered while billing.

Kartik & Co., asks you to the following:

1. Who shall issue a Debit/Credit Note under CGST Act, 2017?
2. Whether Debit Note or Credit Note has to be issued in each of the above circumstances and, if so, quantify the amount for which it is to be issued?
3. What is the maximum time-limit available for declaring the credit note in the GST Return ? [Nov. 2019 Old Course, 5 Marks]

Answer:

1. The debit/credit note shall be issued by the registered person who has supplied the goods and/or services, Le. Kartik & Co.
2. The debit/credit note need to be issued in each of the circumstances as under:
   1. A credit note is required to be issued as the taxable value in invoice exceeds the actual taxable value. The credit note should be issued for the excess value of supply charged in the invoice, i.e. ₹ 20,000.
   2. A debit note is required to be issued as the tax charged in the invoice is less than the actual tax payable. The debit note should be issued for the amount of tax which is charged less, i.e. ₹ 36,000.
   3. A debit note is required to be issued as the value of supply charged in the invoice is less than the actual value. The debit note should be issued for the amount of value which is charged less, i.e. ₹ 1,00,000.
3. The details of the credit note cannot be declared later than the return for the month of September following the end of the financial year in which such supply was made or the date of furnishing of the relevant annual return, whichever is earlier.

Question 8.
Explain the meaning of consignment note in relation to Goods Transport Agency and state its contents as per provisions of the CGST Act, 2017.    [May 2019 Old Course, 4 Marks]
Answer:
Meaning: Consignment note means a document, issued by a Goods Transport Agency (GTA) against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered.

Contents: The contents of consignment note are as follows:-

1. gross weight of the consignment
2. the name of the consignor and consignee (anyone),
3. registration number of the goods carriage in which the goods are transported,
4. details of the goods transported,
5. details of the place of origin and destination,
6. GSTIN of the person liable for paying tax
7. other information as prescribed for a tax invoice, under rule 46 of CGST Rules, 2017.

Question 9.
Mr. Shah, a consignor is required to move goods from Ahmedabad (Gujarat) to Nadiad (Gujarat). He appoints Mehta Transporter for movement of goods. Mehta Transporter moves the goods from Ahmedabad (Gujarat) to Kheda (Gujarat). For completing the movement of goods from Kheda (Gujarat) to Nadiad (Gujarat), Mehta Transporter now hands over the goods to Parikh Transporter.

Explain the procedure regarding e-way bill to be followed by consignor and transporter as per provisions of GST law and rules made thereunder. [Nov. 2019, 5 Marks]
Answer:

• In the given scenario, only one e-way bill is required to be issued.
• Part A can be filled by either Mr. Shah or recipient of goods or Mehta Transporter on the appropriate authorisation.
• Where the goods are transferred from one conveyance to another, the consignor or the recipient, who has provided information in Part A, or the transporter shall, before such transfer and further movement of goods, update the details of conveyance in the e-way bill on the common portal in Part B.
• On reaching Kheda, Mr. Shah or the recipient of the goods, who has filled Part A of the e-way bill, or Mehta Transporter can, before the transfer and further movement of goods, update the details of conveyance in Part B of the e-way bill.
• Further, the consignor or the recipient, who has furnished the informa-tion in Part A, or the transporter, may assign the e-way bill number to another registered or enrolled transporter for updating the information in Part B for further movement of the consignment.
• On reaching Kheda, Mr. Shah or the recipient of the goods, or Mehta Transporter can assign the said e-way bill to Parikh Transporter who will thereafter update the details of conveyance in Part B.
• However, upon updation of the details of the conveyance by Parikh transporter in Part B, Mr. Shah or recipient, as the case may be, who has furnished the information in Part A shall not be allowed to assign the e-way bill number to another transporter.