The below requirements must be met for claiming a reduction in output tax liability:
(a) It can be proven that the incidence of tax and interest have not been passed on to any person;
(b) The details of the credit note are declared within the prescribed timelines as explained in Q 24 above.
(c) The recipient of the supply should accept credit note in his return of inward
supply and reduce his claim of input tax credit to the extent reduction of tax
liability.
(ICAI FAQ PUBLICATIONS 06-09-2017 TAX INVOICE, CREDIT AND DEBIT NOTES: FAQ NO. 25)