The Central Goods and Services Tax Act, 2017
Chapter-VII Tax Invoice, Credit and Debit Notes
Section 34: Credit and debit notes.
34. (1) 1[Where one or more tax invoices have] been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient 2[one or more credit notes for supplies made in a financial year] containing such particulars as may be prescribed.
(2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than 3[the thirtieth day of November] following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
(3) 1[Where one or more tax invoices have] been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient 4[one or more debit notes for supplies made in a financial year] containing such particulars as may be prescribed.
(4) Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.
Explanation.–For the purposes of this Act, the expression “debit note” shall include a supplementary invoice.
References
Enforcement:
Enforced w.e.f. July 01, 2017 [Notification No. G.S.R. 658(E) dated 28.06.2017].
Amendments:
1. Substituted by Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 01.02.2019 [vide Notification No. 2/2019–Central Tax dated 29.01.2019], for the words “Where a tax invoice has”.
2. Substituted by Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 01.02.2019 [vide Notification No. 2/2019–Central Tax dated 29.01.2019], for the words “a credit note“.
3. Submitted by Finance Act, 2022 w.e.f. 01.10.2022 [vide Notification No. 18/2022–Central Tax dated 28.09.2022], for the word “September”.
4. Substituted by Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 01.02.2019 [vide Notification No. 2/2019–Central Tax dated 29.01.2019], for the words “a debit note“.
Circulars:
C1. Circular to clarify the procedure in respect of return of time expired drugs or medicines [Circular No. 72/46/2018-GST dated 26.10.2018]
C2. Financial / commercial credit note(s) can be issued by the supplier even if the conditions mentioned in Section 15(3)(b) of the CGST Act are not satisfied. In other words, credit note(s) can be issued as a commercial transaction between the two contracting parties.[Circular No. 92/11/2019-GST dated 07.03.2019]
C3. For cases related to advanced received, goods returned, TDS, refund etc., refer Circular No. 137/07/2020-GST dated 13.04.2020.
C4. Refund under section 77 of the CGST Act / section 19 of the IGST Act would not be available where the taxpayer has made tax adjustment through issuance of credit note under section 34 of the CGST Act in respect of the said transaction.[Circular No. 162/18/2021-GST dated 25.09.2021]
C5. Filing an application for refund by unregistered persons.[Circular No. 188/20/2022-GST dated 27.12.2022]