How to handle revised invoices

Juliet D'cruz

How to handle revised invoices

Revised invoices along with debit and credit notes are probably one of the most important concepts of accounting, almost as important as the 3 golden rules of accounting. The debit notes, credit notes and revised invoices – all three of them are brought into use after an invoice has already been issued to the customers.

While operating a business there may be several instances wherein as per the norms of GST(Goods and Service Tax) if you have issued an invoice it may need a revision or modification because of certain mistakes. The process of making these amends is called the rectification of invoices.

The process of invoice rectification can lead to what is conventionally called a revised invoice or a supplementary invoice. Some common scenarios in which a rectification may be needed include upward and downward revision of the prices of goods and services or in case of tax(GST) rate change. In such cases credit and debit note are issued:

  • Downward revision calls for a credit note
  • Upward revision calls for debit note (or supplementary tax invoice)

What this means is:

Decrease in value of the invoiceIncrease in the value of invoice
Purchaser issues a debit note to the sellerPurchaser issues a credit note to the seller
Seller issues a credit note to the purchaserSeller issues a debit note to the purchaser

However, in case the invoice has to be made for supplies prior to GST registration is it then referred to as a ‘revised invoice’.

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What kind of scenarios warrant the need for a revised invoice under GST

The GST regime mandates that every taxable dealer should complete the registration process. This means that they should apply for provisional registration and complete the formalities to get the permanent GST registration certificate. Once the dealers obtain the certificate, they need to issue a revised invoice for the invoices raised between the following two dates (within 30 days from when the registration certificate was issued):

  1. GST implementation
  2. Issue of Registration certificate

What is the process of revising GST invoices?

The registered person needs to issue revised invoices for all the invoices issued in the above-mentioned duration. The revised invoice should also mention the details of the original invoice.

What is the format of a revised invoice under GST?

Following are the mandatory components of a revised GST invoice:

  • Recipient’s name, address, GSTIN (if the recipient is registered)
  • Supplier’s name, address, GST number(GSTIN)
  • Name and delivery address (if the recipient is unregistered)
  • Signature/digital signature of the authorized person on behalf of the supplier
  • Alpha-numeric serial number for the invoice relevant to that financial year
  • Invoice date
  • Serial number of the original invoice
  • Date of issue of the revised invoice
  • Type of the invoice(whether it is: Revised invoice/supplementary invoice)

What is the use of supplementary invoices?

If you are wondering what is a supplementary tax invoice. To put it simply, a supplementary invoice is issued in case any problems are present in the already issued tax invoice. It is also known as a debit note.

It is typically used for the rectification of tax-related problems in the invoice that was originally issued under GST. A common situation in which this can happen is when the taxable value of the product has been lessened leading to a lower tax. This may require an upward revision and would call for a supplementary tax invoice also known as a debit note.

The supplementary invoice should resolve all the deficiencies of the original invoice and should also incorporate all the essential fields mentioned above in the format of a revised invoice.

The most prominent difference between a revised invoice and a supplementary invoice is that:

  • Revised invoice is issued against an invoice that was issued prior to GST registration
  • Supplementary invoice is issued against an invoice issued after GST registration for rectification of deficiencies and problems in the original tax invoice.

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