(1) The purchasing dealer shall issue to the seller a duly signed debit note (hereinafter referred to as ‘DN’) in respect of any de-escalation in the price of the goods purchased by him as soon as the amount of such de-escalation, whether interim or final, is settled between the two.
(2) The DN shall necessarily contain the following particulars, namely,
(i) Date of issue of DN;
(ii) Name of the dealer (with TIN, where applicable) issuing DN;
(iii) Name of the seller (with TIN, where applicable) to whom DN issued;
(iv) Description, quantity and amount of de-escalation in respect of the goods whose value de-escalated;
(v) Tax, if any, relating to the amount of de-escalation;
(vi) Date(s) and number(s) of original invoice(s) issued by the seller in respect of the sale of the goods referred to in item (iv).
(3) The amount mentioned in a DN issued under the circumstances when the agreement of sale provides for de-escalation in the price of the goods sold under the agreement and the final prices of the goods could not have been determined at the time of their original sale, shall, subject to the purchasing dealer, wherever applicable, reversing input tax relating to the amount of de-escalation, be reduced from the gross turnover in respect of the tax period in which the debit note was issued otherwise, it shall be ignored.
(4) Where the person returning the goods is not a dealer or is a dealer in other State who did not issue a DN in respect of de-escalation in the price of the goods, the dealer who sold the goods may issue a credit note for the amount of de-escalation and deduct such amount from his gross turnover, and he shall, when so required by an assessing authority, furnish evidence of the credit of the amount of de-escalation to the account of, and payment to, the purchaser of the goods.
25. A VAT dealer who wishes to make any of the following deductions from his gross turnover shall, when so required by an assessing authority, produce before it the documentary evidence in support thereof as mentioned against each, namely: Deduction Documentary evidence
(a) Turnover of sales made outside the State, of goods purchased outside the State Purchase and sale invoices and documents relating to receipt and delivery of goods outside the State.
Escalation in the price of goods.
section 2(1)(u).
De-escalation in the price of the goods.
section 2(1)(u).
Computation of taxable turnover.
section 6.
17
(b) Turnover of sales made in the course of inter-State trade and commerce to a dealer registered under the Central Act or to a Government department Sale invoice, declaration in Central form C or D, as the case may be, and documents showing delivery of goods outside the State.
Note Where the delivery of the goods outside the State is proved but declaration in Central form C or D is not produced, such delivery may, in accordance with the provisions of the Central Act, be deemed to have taken place as a result of sale made in the course of inter-State trade and commerce to a dealer not registered under the Central Act.
(c) Turnover of sales made in the course of inter-State trade and commerce to any person who is not a dealer registered under the Central Act Sale invoice and documents showing delivery of goods outside the State.
(d) Turnover of sales made in the course of import of goods into the territory of India Sale invoice and documents showing constructive delivery of goods to the purchaser.
(e) Turnover of sales made in the course of export out of the territory of India within the meaning of sub-section (3) of section 5 of the Central Act Sale invoice, declaration in Form VAT-D2 or Central form H, as the case may be, and documents showing export of goods out of India.
Note Where the delivery of the goods outside the State is proved but declaration in Central form H is not produced, such delivery may, in accordance with the provisions of the Central Act, be deemed to have taken place as a result of sale made in the course of inter-State trade and commerce.
(f) Turnover of sales made in the course of export of goods out of the territory of India within the meaning of sub-section
(1) of section 5 of the Central Act Sale invoice, custom clearance certificate and shipping documents.
(g) Turnover of export of goods out of State Documents showing delivery of goods outside the State and declaration in Central form F.
Note Where delivery of goods outside the State is proved but no declaration in Central form F is produced, such delivery may be deemed to have taken place as a result of sale in the course of inter-State trade and commerce.
(h) Turnover of disposal of goods otherwise than by sale Documentary evidence showing disposal of goods otherwise than by sale.
(i) Turnover of sale of exempted goods Sale and purchase invoices.
(j) Turnover of sales made to the following Organisations of the United Nations for institutional use- Sale invoice and certificate in Form VAT-C2 signed by an authorised officer of the organisation.
I. United Nations International Children’s Emergency Fund (UNICEF); and II. World Health Organisation (WHO).
(k) Turnover of return of goods sold Delivery-cum-debit note raised by the purchaser of the goods for the return of 18 the goods, delivery note(s), if issued separately by the purchaser at the time of returning the goods, and the original sale invoice(s) in respect of the goods.
(l) De-escalation in the price of goods sold Original sale invoice(s), agreement of sale providing for de-escalation in the price of the goods and debit note issued by the purchaser of the goods in respect of de-escalation.