Credit notes that point back to the right invoice.
Reduce an invoice for returned goods, a lower price or a missed discount. The original invoice number and date print on the note.
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What is a credit note under GST?
A credit note is issued by a supplier to reduce the value or the tax of an invoice already issued.
Under Section 34 of the CGST Act, you issue one when the taxable value or tax on the invoice was too high, when goods are returned, or when goods or services turn out to be deficient. It quotes the original invoice and is reported in GSTR-1. It must be declared by 30 November after the end of the financial year of the supply, or by the date you file the annual return if that is earlier. Your customer reduces their input tax credit to match.
When you need one
- A customer returns goods
- You charged too much, or at the wrong GST rate
- You agree a discount after the sale
- Goods or services fell short of what was agreed
It reduces what your customer owes. To increase it, issue a debit note.
General guidance, not legal or tax advice. Rules change, so check what applies to your business with your accountant.
Everything a credit note needs.
Linked to the original invoice, with the tax worked out again.
- Credit note numberIn its own series.
- Original invoiceIts number and date.
- ReasonReturn, price change or discount.
- Items and tax reducedWith the CGST and SGST, or IGST.
- Amount in wordsIn lakh and crore, or million.
- Tally exportAs a credit note voucher, on Pro.
Three steps, about a minute.
- Fill in the detailsYour business fills in from your profile. Pick a saved customer, then add your items.
- Make it yoursChange colours and fonts, add fields, hide what you don’t print, or use your own letterhead on Pro.
- Download or sendGet the PDF, or share a link your customer can open on any phone.
