Credit notes and debit notes under GST

Once a tax invoice is issued you shouldn't edit it. If the amount turns out to be wrong, you correct it with a separate document that refers back to the invoice.

Credit note — the amount goes down

Issue a credit note when the taxable value or tax charged on an invoice was more than it should be: for example, a discount agreed after the invoice, goods returned, services found deficient, or a simple overcharge.

Debit note — the amount goes up

Issue a debit note (sometimes called a supplementary invoice) when the value or tax was lower than it should be, for example because extra work was added after invoicing.

What it should contain

• Your name, address and GSTIN
• The words “Credit Note” or “Debit Note”, a serial number unique for the financial year (up to 16 characters), and the date
• The recipient's name, address and GSTIN (if registered)
• The number and date of the original tax invoice(s)
• The taxable value, tax rate and the tax amount being credited or debited
• Your signature or digital signature

Time limit for credit notes

A credit note has to be declared in your GST returns by the earlier of 30 November after the end of the financial year in which the original supply was made, or the date you file the annual return for that year. Debit notes don't have the same deadline, but your customer's input tax credit on them is time-bound. Check the current rules before the deadline.

In Cruzeviz

In Cruzeviz, issue a credit note against a sales invoice when the amount should be lower, and a debit note against a purchase bill when you return goods or reduce what you owe. Void an invoice only when it was sent in error. Voiding keeps the number on record and does not replace a credit note.

This guide is general information, not tax or legal advice. GST rules change; check the current rules or ask your tax adviser for your situation.

Related: GST invoice format · All guides