A document issued by a seller to increase the amount owed by a buyer, or by a buyer to formally request a credit from a seller for returns or overcharges.
A Debit Memo (or Debit Memorandum) increases the buyer's payable amount when issued by the seller (for additional charges, undercharging, or supplementary invoices), or reduces the seller's receivable when issued by the buyer (to notify of returns or request credit). Under GST, a Debit Note is issued when the taxable value or tax charged in the original invoice is less than the actual amount — this increases the seller's output tax liability. Common scenarios include: freight charges added after invoicing, price escalation clauses triggered, quantity revisions upward, and supplementary GST charges. Like credit memos, debit memos must reference the original invoice.
Original Invoice #601: 500 kg steel @ ₹80/kg = ₹40,000 + 18% GST = ₹47,200. Price revision clause triggered — new rate ₹85/kg. Debit Note #DN-044: 500 kg × ₹5 difference = ₹2,500 + GST ₹450 = ₹2,950. New total payable: ₹47,200 + ₹2,950 = ₹50,150.
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When the original tax invoice understates the taxable value or the tax charged is less than the correct amount. Common triggers: price escalation, supplementary charges, quantity revisions, or errors in the original invoice. The debit note must be reported in GSTR-1 for the relevant period.
Seller issues debit memo: Debit — Accounts Receivable, Credit — Revenue + GST Payable. Buyer receives debit memo: Debit — Purchases/Expense + GST Receivable, Credit — Accounts Payable. Both parties' ledgers are updated to reflect the additional obligation.
A document issued by a seller to increase the amount owed by a buyer, typically when the original invoice amount was less than the actual value.
A document issued by a seller to a buyer reducing the amount owed, typically for returned goods, billing errors, or post-sale adjustments.
A commercial document issued by a seller to a buyer, detailing the products or services provided, quantities, prices, and payment terms.
A legal document issued by a registered GST dealer to a buyer showing the details of goods/services supplied, their value, and the applicable GST charged.
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