Credit and debit notes

(1) This section applies where a registered person has given a tax invoice in respect of a taxable supply and thereafter– (a) the supply is cancelled; (b) the consideration for the supply is altered, whether due to a discount or otherwise; 60 (c) the goods or services supplied, or any part thereof, are returned to the supplier; or (d) the nature of a supply, whether or not it was a taxable supply, is fundamentally varied or altered. (2) Where this section applies, the supplier shall give to the recipient a credit note or a debit note, as the case requires, to adjust the amount of GST shown on the tax invoice to the amount, if any, (referred to in this section as “the adjusted amount”) that would have been so shown if– (a) the cancellation or alteration referred to in sub- section (l) (a) or (b) had taken place before the tax invoice was given; or (b) the goods or services returned had not been supplied, as the case requires. (3) For the purposes of sub-section (2)– (a) a credit note shall be given by the supplier where the amount of GST shown on the tax invoice, as affected by any previous credit or debit notes issued in respect of the supply, was more than the adjusted amount; and (b) a debit note shall be given by the supplier where the amount of GST shown on the tax invoice, as affected by any previous credit or debit notes issued in respect of the supply, was less than the adjusted amount. (4) A credit note or debit note required by sub-section (2) to be given shall include– (a) the words “credit note” or “debit note”, as the case requires, shown conspicuously thereon; 61 (b) the name, address and TIN of the supplier; (c) the name and address of the recipient; (d) the date on which the credit note or debit note as the case requires is given; (f) the amount shown on the tax invoice as being the GST payable on the supply, the adjusted amount, and the amount of the difference between them; and (g) a brief explanation of the circumstances giving rise to the note being given. (5) A supplier who gives a credit note under this section may, in calculating the amount of tax payable, or the amount of the refund due, for the tax period in which the credit note is given, include the amount of the adjustment as an input tax credit allowed to him during the tax period. (6) A supplier who gives a debit note under this section shall, in calculating the amount of tax payable, or the amount of the refund due, for the tax period in which the debit note is given, include the amount of the adjustment as output tax payable by him during the tax period. (7) A recipient who– (a) being registered, is given a credit note under this section; and (b) in calculating tax payable by him, has taken into account as input tax the amount that, in the tax invoice to which the note relates, was shown as being in respect of tax, shall, in calculating the amount of tax payable, or the amount of the refund due, for the tax period in which the credit note is 62 given, include the amount of the adjustment as output tax payable by him during the tax period. (8) A recipient who– (a) being registered, is given a debit note under this section; and (b) in calculating tax payable by him, has taken into account as input tax the amount that, in the tax invoice to which the note relates, was shown as being in respect of tax, may, in calculating the amount of tax payable, or the amount of the refund due, for the tax period in which the debit note is given, include the amount of the adjustment as an input tax credit allowed to him during the tax period. (9) A supplier shall not give more than one credit note or debit note in respect of the same adjustment but this sub-section does not prevent him from providing a copy, clearly marked to indicate that it is a copy, where the original of a note has been lost. (10) A person who contravenes this section commits an offence and is liable on summary conviction to a fine of not less than three thousand dollars and not more than five thousand dollars, or to imprisonment for a term not exceeding one year, or to both such fine and imprisonment.