24. De-escalation in the price of the goods. section 2(1)(u).

 (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, ¾

(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.