As per section 34(1) of the CGST Act, for issuing a Credit Note, a tax invoice for a supply should have been issued earlier. A credit note may be issued in the following cases:
The taxable value on which the tax is collected is more than the actual taxable value;
The tax charged is more than what should have been charged;
The recipient has returned the goods or
The recipient has found that the goods or services or both supplied are
deficient.
(ICAI FAQ PUBLICATIONS 06-09-2017 TAX INVOICE, CREDIT AND DEBIT NOTES: FAQ NO. 22)