Issuance of credit note of inactive supplier

Hi! I hope you can enlighten me on our current issue. We have a supplier whose GST registration got cancelled in October 2015 but still continued to issue tax invoices with GST.  We had received several tax invoices in December 2016 for services performed in December 2016. We had claimed the related input GST in December 2016 GST return not knowing that their GST registration is already inactive. It’s just recently that we’ve known their status by checking in the GST Lookup website. With respect to the deregistration that has happened back in 2015, would it still be feasible for them to issue us a Credit Note to cancel out the GST previously charged to us? Would there be any implications that may impact our returns and also any possibilities that may lead us into unfavorable situation with Customs? Thank you in advance for your response.

Asked on March 28, 2017 2017-03-28 08:13:47 Business (商家)
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2 Answer(s)

Once a GST registered person has deregistration himself, he is not allow to charge GST.  In your case, you have already claim input tax credit on those non-GST registered Tax Invoice.  You need to account for output tax by doing adjustment (AJS).  For a better and clearer view of how to go about this as well as to avoid being penalize for wrong doing later, I would suggest you consult the GST Officer at the Customs near your place.

Answered on March 28, 2017. 2017-03-28 09:04:19

Thank you for your prompt response. We will do so accordingly.  Just a follow-up question regarding the issuance of credit/debit notes. Section 25 of the principal GST Regulations of 2014 states that:

Issuance of credit note and debit note
     25. (1) A person making or receiving a supply shall issue a credit note or debit
     note where, after the return for the supply has been furnished to the Director General,
     there is a change in the consideration for the supply—…

As stipulated, either party (vendor or buyer) can issue debit or credit notes. Please confirm if our understanding is correct.  But we also note that this is somehow not consistent with the provisions under the General Guide and Tax Invoice and Records Keeping Guide which states that the debit/credit note is issued by the supplier. We understand though that principal Act and Regulations will prevail over the guides.

on March 28, 2017. 2017-03-28 11:15:36
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The Act is very general and that is the reason why you need to consult with the GST Officer at the nearest Customs.  They are the law maker.  You have to follow what they advise you.

Answered on March 29, 2017. 2017-03-29 01:31:22
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