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Credit Note in GST

Credit note under GST

Section 34 of CGST Act, 2017 allows the supplier to issue a credit note to the recipient if the amount charged in the invoice is higher than the actual amount payable. Relevant provisions of section 34 are reproduced as under- 

(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 a one or more credit notes for supplies made in a financial year containing such particulars as may be prescribed.

Post issuance of a credit note, the tax liability of the supplier will reduce. The credit note facility in GST facilitates the supplier to decrease his tax liability in his GST returns without requiring him to undertake any tedious refund process.

Format of a credit note as per CGST rules

According to Rule 53(1A), a credit note shall contain the following particulars, namely:–

  • Name, address and Goods and Services Tax Identification Number of the supplier
  • Nature of the document i.e. credit note
  • A consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters-hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year
  • Date of issue of the document
  • Name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient
  • Name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered
  • Serial number(s) and date(s) of the corresponding tax invoice(s) or, as the case may be, bill(s) of supply;
  • Value of taxable supply of goods or services, rate of tax and the amount of the tax credited or, as the case may be, debited to the recipient
  • Signature or digital signature of the supplier or his authorised representative

 


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CA Anand Singh

CA Anand Singh

I am a practising Chartered Accountant with 6 years of experience in Direct and Indirect Taxation, FEMA, Corporate Law and Audit etc.