Free Debit Note Format

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Free Debit Note Format

What is a debit note?

A debit note is a document issued from a buyer to a seller. A debit note confirms that a buyer has returned purchased goods or services to a seller. It serves as the buyer's formal request for a credit note.

The cause may be incorrect, damaged goods received, or cancellation of the order. Debit notes indicate a purchase return in the buyer's accounting books.

Reasons for issuing debit notes:

A customer can issue a debit note if they purchase goods from a seller or supplier and want to return them for any valid reason.

A buyer initiates purchase return for goods when:

  • The supplier delivers defective, damaged goods;
  • The shape, size, or quantity is wrong;
  • The supplier didn't deliver goods or services on time;
  • There are calculation errors in a bill;
  • Suppliers charged higher taxes on goods or services;
  • The buyer doesn't want to purchase the goods or services.

The seller may also issue a debit memo in the following situations:
  • When the seller needs to make adjustments to the invoice;
  • When there is a change in billing amount;
  • When a buyer increases their order quantity;
  • To remind the buyer of their current debt.

Importance of Debit Note under the GST Law

The GST law allows debit note issuance in two situations:

(a). A change in tax rates after the invoice has been issued.
(b). A change in the taxable value of the goods or services after the invoice is issued.

A debit note forms part of the details concerning GSTR-1, the month in which the supplier supplied the goods. The exact details are part of the recipient's Form GSTR-2A and GSTR-2B. Once the verification is done, the recipient can accept it and submit it as part of his GSTR-3B.

Earlier, citing the original invoice number was mandatory while reporting a debit note. It must be quoted on the GSTN portal in Form GSTR-1 and Form GSTR-6.

However, the amendment regarding delinking of debit notes from their original invoice states that:

1. The issuer can provide the place of supply for a particular debit note to identify the supply type.
2. Entering the tax amount is sufficient when the debit note is issued because of the difference in the tax rate.


The delinking amendment also impacted the treatment of Input Tax Credit (ITC) for debit notes. The time limit for availing of ITC was the invoice date before the amendment. However, after the amendment, the time limit for availing of ITC is now computed per the debit note issue.

Time limit to Issue a Debit Note:

Generally, a buyer can issue a debit note at any time. As per Section 34(2) of the CGST Act, a buyer can give a debit note at the earliest of the following: On or before 30th September

Or

On or before the date of filing the annual return

If the buyer does not issue a debit note within the stipulated period, the tax liability, interest levy, and penalties will increase.

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Difference between Debit Note and Credit Note:

The invoice records the sale to a business and its client. A debit note informs a buyer of their current debt obligations. A seller creates an invoice when sales are made. A buyer creates a debit note when returning goods received on credit.

Difference Between Debit Note Format And Credit Note Format

The invoice shows the total amount of the sales. The debit note will indicate the credit amount, the inventory, and the reason for returning the items.

An invoice records a sales transaction that has been completed. Debit notes provide information about past transactions that remain unpaid. A sales invoice is used when payment has already been made for the sale. Accounts receivable are the basis for debit notes.