Category: Credit Note

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)

The credit note should be declared in return of outward supplies (GSTR-1) for the month of May.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX INVOICE, CREDIT AND DEBIT NOTES: FAQ NO. 23)

A credit note can be issued for any supplies. However, in order to declare the details of the credit note and thereby claim a reduction in output tax liability, it must be issued and declared in a return for the month during which such credit note has been issued but not later than September following the end of Financial Year in which such supply was made, or before filing of the annual return for that Financial Year, whichever earlier and the tax liability shall be adjusted in such manner as may be prescribed: E.g. Assuming that annual return for the year 2017-18 is not yet filed, a credit note can be issued in respect of any of supplies made during the year 2017-18, up to 30th September 2018. However, if the Annual Return is filed for financial year 2017 18 on 30th June 2018, then the details of the credit note for the year 2017-18 cannot be declared in the returns file after 30th June 2018.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX INVOICE, CREDIT AND DEBIT NOTES: FAQ NO. 24)

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)

These documents shall contain the following details:
(a) Name, address, GSTIN of the supplier
(b) Nature of the Document – i.e., Debit Note / Credit Note / Supplementary invoice / Revised Invoice;
(c) Consecutive Serial Number unique for a financial year having alphabets/ numerals and special characters being “-“ or “ / “ only
(d) Date of Issue
(e) Name, address of the recipient and GSTIN/UID of the recipient, if registered
(f) Name and address of the recipient and address of delivery, along with the name
of State and its code, if such recipient is unregistered
(g) Serial number and date of the corresponding tax invoice/ bill of supply
(h) Taxable value of goods or services, rate of tax and the amount of tax credited/
debited to the recipient
(i) Signature/Digital Signature of the Suppler or his authorised representative.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX INVOICE, CREDIT AND DEBIT NOTES : FAQ NO. 33)