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Credit note format

A GST credit note reduces the taxable value or tax on an invoice you have already issued, after a return, an overcharge or a post-sale discount. Section 34 of the CGST Act allows it and Rule 53 sets out what it must contain.

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Credit note format · example

FromYamuna Electricals Distributors
ToPink City Electric Mart
CurrencyINR
DescriptionQtyPriceAmount
Ceiling fan 1200 mm, returned damaged in transit (HSN 8414)6₹2,400.00₹14,400.00
Total₹16,992.00

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How to use the credit note format

  1. Use the same seller and buyer details as the original invoice.
  2. Quote the original invoice number and date, and the reason, in the notes.
  3. Add the items or amount being credited at the original GST rate.
  4. Save it; sign in to issue it and report it in GSTR-1.

Credit note format under Rule 53

  • The words "Credit note"
  • Supplier name, address and GSTIN
  • A serial number of up to 16 characters, consecutive and unique within the financial year
  • Date of issue
  • Recipient name, address and GSTIN or UIN
  • Serial number and date of the original tax invoice
  • Value of the goods or services and the taxable value credited
  • Rate of tax and amount of tax credited: CGST and SGST, or IGST
  • Signature or digital signature of the supplier

Worked example

A Delhi distributor invoiced a Jaipur retailer for 50 ceiling fans at ₹2,400 each plus 18% IGST. Six arrive damaged and are returned. The credit note shows 6 fans at ₹2,400, taxable value ₹14,400, IGST ₹2,592, total ₹16,992, against the original invoice number and date. The supplier reduces its output tax in the month it reports the note; the buyer reverses the same amount of input tax credit.

Common mistakes

  • Editing or cancelling the original invoice instead of issuing a credit note
  • Crediting at a different GST rate from the original invoice
  • Missing the 30 November deadline, after which the tax can no longer be reduced
  • Covering several invoices on one credit note without listing each of them
  • Leaving it out of GSTR-1, so your reduction and the buyer's reversal do not match

Questions

When can a credit note be issued under GST?

When the taxable value or tax charged on an invoice was more than it should have been, when goods are returned, or when goods or services supplied are found deficient.

Is there a time limit?

Yes. A credit note must be declared in a return by 30 November following the end of the financial year of the original supply, or by the date of filing the annual return if that is earlier.

Can I reduce GST for a discount given after the sale?

Only if the discount was agreed at or before the time of supply, is linked to specific invoices, and the buyer reverses the matching input tax credit. Otherwise issue a financial credit note that does not reduce GST.

What is the difference between a credit note and a debit note?

A credit note reduces what the buyer owes. A debit note, also issued by the supplier, increases it, for example when the price was undercharged.

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