Journal Entries of Debit Note if GST Applies


Hope, you will already read the journal entries of Debit Note before applying of GST. Now GST has applied in India. Now, every accounting record will be fully adopt GST. Now, we again define the Debit Note and also  pass the journal entries in which we will also adjust GST.

Debit Note 

Debit Note is the Document which is prepared by us.

1. Which is given to Supplier for the Proof  That we returned his bought goods. We have debited his account. This enote will help to pass the journal entry of purchase return. It is given by customer to his creditor. He inform that he will now pay less amount to his supplier.

Apply of GST 

GST will also adjust against original invoice. GST liability will less due to purchase return.

In the Books of Debtor 


Creditor / Supplier  Account Debit

Purchase Return Account Credit
CGST Account Credit
 SGST Account Credit

For example

Our supplier has sent dead product to us of Rs. 10,000. Applicable GST is 18%
We have issued Debit note and we have pass following purchase return entry and also adjust same GST from already paid GST.

Creditor Account / Supplier Account Debit 11800
Purchase Return Account Credit 10,000
CGST Account Credit 900
SGST Account Credit 900

2. If our customer will not pay on the time. At that time as supplier, we can also take the penalty. At that time, we will issue debit note to customer and inform him that we are debiting his account. It means, you did not pay on the time.. Now, you have to pay both sale amount and penalty.

Apply of GST 

If we charge the penalty on our customer for not paying us on the time. Our customer's GST liability will also increase and our liability will also increase. Means GST on penalty which we have to deposit in Govt. account. Both penalty and GST liability will mention in Debit Note

In the Books of Supplier 


Our Customer / Debtor Account Debit
Penalty on Not Paid of Sales Value Credit
CGST Account Credit
SGST Account Credit

For example

Mr. A is our customer, who did not pay our Rs. 1,00,000 on the time. So, we have charged penalty. So, we have to record receivable penalty plus GST of 18%

Mr. A Account Debit 11800
Receivable Penalty or Penalty Account Credit 10000
CGST Account Credit 900
SGST Account Credit 900


3. If we received Discount from Our Supplier for Fast Payment. We can Issue Debit Note or Accept Credit Note for debit his account and Rest amount we have to Pay.

Apply of GST

At that time, our GST Tax liability will also decrease upto the level discount on fast payment.

In the Books of Customer/ Debtor 


Creditor  Account / Supplier Account Debit

Discount on Fast Payment Account Credit

CGST Account Credit

SGST Account Credit

For Example

Mr. B is our  supplier. He has offered us to pay before 30th Aug. 2017 and he will give Discount of Rs. 10,000. We are ready to  pay one month before. So, we have to debit our Creditor in our book plus decrease our GST liability through Debit Note. GST is 18%

Mr. B account Debit 11800

Receivable Discount on Fast Payment Account Credit 10000

CGST Account Credit 900

SGST Account Credit 900


Further Reading 

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Accounting Education: Journal Entries of Debit Note if GST Applies
Journal Entries of Debit Note if GST Applies
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