debit & credit note pdf

When goods supplied are returned or when there is a revision in the invoice value due to goods (or services) not being up to the mark or extra goods being issued a Debit Note or Credit Note is issued by the supplier and receiver of goods and services.

1- Debit Note for Purchase Return Some time goods purchase with GST needs to be returned for any fault or other reason hence we used to raise Debit Note against Purchase Invoice (Please Note that one debit note against one Invoice) (One debit Note cannot be used against multiple Invoice in Tally)

When the amount payable by buyer to seller decreases –There can be a change in the value of goods after the goods are delivered and invoice is issued by the seller. This can be due to a return of goods or due to the bad quality of the goods delivered, etc. In this case, the value of goods decreases due to which a Debit Note is issued by the purchaser to the seller. The Debit Note provides details of the amount of money debited from the sellers’ account and also states the reason for the same. The reason behind this – In the purchaser’s books of account the seller will have a credit balance. When a debit note is issued the credit balance of the Sellers account decreases, thus reducing the seller’s balance. It means that that lesser amount is required to be paid by the buyer to the seller to settle his liability. Thus debit note reduces the liability for the buyer. The seller issues a Credit Note as a response or acknowledgment to the Debit Note

Debit Note for Purchase Return

2- Debit Note for Discount Received on Purchase

3- Debit Note for Correction against Sales Invoice for any additional amount to be recovered from the customer such as Transport amount, Rate Difference Account etc (Debit Note against Sales)

Example: Purchase Goods 100Qty@100Each @18% GST on 1st April

Out of above Purchase 10 Qty Returned for any reason Pass Debit Note Gateway of Tally>>Accounting Voucher>>CTL+F9 Debit Note>>Item Invoice mode

Provide the details under GST details such Nature/Document No/Date of Supplier

2- Debit Note for Discount Received on Purchase Some time discount on Purchase received for the lump-sum value it will be treated as Inclusive of GST amount

Let us continue with Same Example Purchase worth Rs 1,18,000 (Including Tax 18000)

We received any discount for Rs 11800 then this 11800 Rs can be treated as Including GST amount depending upon Credit Note raised by Supplier

If supplier raised credit Note with GST it means supplier intends to decrease Tax liability and we have to decrease our Input Tax Credit on Purchase as well (This debit note is to decrease payable amount and not return of goods so pass below entry) Option A : (Pass entry in Account Invoice mode or Voucher Mode) As we are getting a discount so it will decrease our Purchase value so we can pass the entry by following way Before Passing entry Press F12>>Enable the option for Modification of GST

Select Stock Item but do not mention any quantity Option B : If we select Discount Received Ledger instead of Purchase ledger As we all know Discount Received is an Income Part but if we select Income then Tally will not show the accurate report under GSTR2 as it should be subtracted from GSTR2 hence you need to keep your ledger either under Purchase Account or Indirect Exp

ENTRY

3) Debit Note against Sales (For Correction of Invoice such Transport Charge\Freight Charges\Rate Difference)

Sometimes While making sales Invoice we forgot to add some kind off charges such as courier/transport/freight/Rate difference amount hence we raised Debit Note against sales Invoice to tackle such case pass below the entry

Option A: Raising Debit Note for any charges to be collected One thing we should understand that Charges to be collected from customer is actually our income.

Example: To deliver some order we hire a truck from Factory location to Buyers or consignee location for which Transporter raise bill on us not on the buyer as we have hired Transporter. In this case, Transport Charges Paid on that is Independent exp and Transport Charges Collected on Invoice is composite Supply Income hence It is better to create 2 different ledgers for Transport Charges Exp & Transport Charges on Sales

Entry: Sales Entry

ENTRY: Debit Note for Additional Charges

Set/alter GST Details

Option B: Rate Difference Some time It happens that Product price was 1000 Rs but we charged only 900 hence for 100 Rs we need to raise Debit Note (Pass Debit Note in Voucher mode press CTL+V)