What it means
Section 34 lets the supplier issue a credit note when goods come back, the price is reduced, or too much tax was charged. Rule 53(1A) asks for the same supplier and buyer details as an invoice, the words “credit note”, its own number and date, the invoice or invoices it relates to, the value, and the tax reduced. It must be declared in the return for a month no later than 30 November after the end of the financial year, or the annual return date if earlier. The buyer must reverse the matching input tax credit.
Example
Shree Lakshmi Hardware returns 10 damaged taps from invoice KA/26-27/0412. Kaveri Agencies issues credit note KA-CN/26-27/018 on 10 Nov 2026:
| Line | Amount |
|---|---|
| 10 taps at ₹1,250 | ₹12,500 |
| CGST 9% | ₹1,125 |
| SGST 9% | ₹1,125 |
| Total credited | ₹14,750 |
It goes in Kaveri’s GSTR-1 (CDNR table) and in the buyer’s GSTR-2B as a reduction of credit.
Common mistakes
- Issuing a credit note without GST for a GST sale, so tax is never reduced.
- Missing the 30 November cut-off; after that the tax cannot be reduced.
- Confusing it with a purchase return “debit note” the buyer raises in its own books.
In MyRecords
On a submitted sales invoice, “Credit note (choose what)” makes a draft note for all of it, some items or a price correction, with the GST reason, and takes goods back into stock when they return. It copies the invoice’s lines and tax, posts the reversal to the ledger when submitted, prints as a credit note and goes into the CDNR or CDNUR table of the GSTR-1 file. See also our free credit note template.