Supplier credit note input tax should be reviewed against the original purchase and any GST already claimed. A supplier issuing a credit and later refunding cash are separate events. Give the accountant both the credit note and original claim trail before finalising the GST return support.

Accounting records, calculator and glasses on a desk
Illustrative photograph by Cht Gsml.

Identify the purchase being reduced

Record the supplier, credit-note reference, reason, amount and tax component. Link the original invoice and the return, discount or cancellation evidence. Distinguish a credit against an unpaid invoice from a refund of a purchase already settled.

Check whether the original input tax was claimed and in which period. Do not assume every purchase with GST printed on it produced an allowable claim.

Review the GST consequence

IRAS’s GST-return guidance addresses reductions in GST incurred where a credit note is received, including purchase returns and supplier discounts. Ask the accountant to apply the relevant adjustment to the actual transaction and return period.

A credit note explicitly issued without a GST adjustment needs separate checking under the official conditions. Do not infer its GST effect solely from the cash amount or the supplier’s account balance.

Example: goods are partly returned

The supplier credits part of a paid purchase and will refund the money later. Keep the purchase reduction, input-tax review and expected refund linked but distinct. Posting the bank refund later should not create a second GST reduction for the same credit.

Reconcile and retain

Match the supplier ledger, approved return calculation and eventual cash settlement. Preserve unresolved documentation requests and the accountant’s decision. If an earlier return may contain an error, seek the correct correction advice instead of quietly moving the issue into a convenient later period.

Related practical guidance

For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.

Official guidance: IRAS official guidance.

Help with your company records

For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.