Credit note and debit note under GST: when to issue them and the time limit

Once a tax invoice is issued you should not edit it. If the amount turns out to be wrong, you correct it with a credit note or a debit note under Section 34 of the CGST Act.

When to issue a credit note

When the invoice shows more than it should:

• The customer returned some goods.
• You gave a discount after the sale that was agreed in advance.
• The service was deficient or incomplete.
• The rate or tax on the invoice was higher than correct.

A credit note reduces your tax liability for that sale, and the customer reduces their input tax credit.

When to issue a debit note

When the invoice shows less than it should, for example a price increase after the sale, extra quantity supplied, or tax charged at a lower rate by mistake. A debit note increases your tax liability.

Time limit for a credit note

A credit note must be reported no later than 30 November after the end of the financial year in which the original supply was made, or the date you file the annual return for that year, whichever comes first. For a sale in 2026-27, that is 30 November 2027 at the latest. After that you cannot reduce your tax through a credit note.

What a credit or debit note must show

• The words "Credit Note" or "Debit Note".
• Your name, address and GSTIN, and a serial number and date.
• Customer's name, address and GSTIN.
• The original invoice number and date it relates to.
• Value, tax rate and tax amount of the change.
• Your signature.

Reporting in GSTR-1

Credit and debit notes to registered customers go in the CDNR table, and those to unregistered customers in CDNUR, in the GSTR-1 for the month in which you issue them.

In CoreAnalytiq you can make a credit note against any invoice in one click. It picks up the original invoice number and items, and appears in your GSTR-1 Excel automatically.