Frequently Asked Questions
When should I issue a credit note? ＋
Issue a credit note when you need to reduce the value of a previously issued invoice — e.g., goods returned by buyer, discount given after invoice, excess GST charged, or cancellation of supply. Under GST, credit notes must be issued by September 30 of the following financial year.
When should I issue a debit note? ＋
Issue a debit note when you need to increase the value of a previously issued invoice — e.g., additional charges, price revision upward, or short payment correction. The buyer issues a debit note to the supplier requesting credit for returned goods.
Do credit/debit notes need to mention the original invoice? ＋
Yes. Under GST rules, credit and debit notes must reference the original tax invoice number and date. This links the adjustment to the original supply and allows proper ITC adjustment on both sides.
How does a credit note affect GST? ＋
A credit note reduces the supplier's output tax liability and the buyer's ITC (Input Tax Credit). The supplier must report credit notes in GSTR-1 and adjust in GSTR-3B. The buyer must reverse the related ITC.
What is the time limit to issue a credit note under GST? ＋
A supplier must issue a GST credit note by the earlier of: (a) September 30 of the next financial year after the supply, or (b) the date of filing the annual return (GSTR-9) for the year in which the supply was made.