Core rule: rule 20 requires a credit or debit note for a relevant change in the value of a supply. Identify the original invoice, parties, reason, adjusted value and corresponding VAT; keep the prescribed monthly records.
Example: goods originally invoiced at NPR 100,000 plus NPR 13,000 VAT are partly returned. The accepted return has a net value of NPR 20,000. A properly supported credit note reduces value by NPR 20,000 and VAT by NPR 2,600.
The seller and buyer must reconcile the adjustment with their sales and purchase records and relevant return treatment. Keep evidence that the return or price change actually occurred.
Do not erase an invoice to hide a transaction. A customer's failure to pay is not, by itself, a genuine return or agreed price reduction.