In terms of Rule 39(1) (j) of the CGST Rules, 2017 any ITC required to be reduced on account of issuance of a credit note to the ISD by the supplier shall be
reduced from the amount to be distributed in the month in which the credit note is included in the return in FORM GSTR-6; and
Added to the output tax liability of the recipient and where the amount so
apportioned is in the negative by virtue of the amount of credit to be distributed is less than the amount to be adjusted.
(ICAI FAQ PUBLICATION 06-09-2017 -: Input Tax Credit: FAQ NO. 51)