GST credit note under Section 34 — for sales returns, post-sale discounts, rate corrections, deficient supply. Free PDF.
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A GST credit note is issued by the supplier under Section 34 of the CGST Act 2017 when the tax invoice value or tax charged is higher than it should be. Four common reasons: sales returns, post-sale discounts not agreed at the time of sale, rate corrections, and deficient supply. The credit note reduces both the supplier's output tax liability and the buyer's input tax credit — hence it must be reported in GSTR-1 of the month it is issued.
A credit note is issued by the supplier when the original invoice overcharged (reduces supplier's GST). A debit note is issued when the original invoice undercharged (increases supplier's GST). Both must be reported in GSTR-1 of the issue month and are matched automatically with the counterparty's GSTR-2A.
When the original tax invoice was raised for a value or tax amount higher than it should be — sales returns, post-sale discounts, rate corrections, deficient supply.
Credit notes must be issued and reported in GSTR-1 by the earlier of (a) September following the end of the financial year of the original invoice, or (b) the filing of the annual return. Beyond that, no tax adjustment is allowed.
Yes — same GSTIN as on the original invoice. The credit note is matched against the original invoice in the GSTN system.