Credit notes and debit notes under GST
How to undo or top up an invoice you have already issued, without deleting it.
Last checked 20 September 2026
A credit note reduces what a buyer owes on an invoice already issued — for a return, an overcharge or a post-sale discount. A debit note increases it, when the original invoice charged too little. Neither replaces the invoice: both reference it and adjust it.
Which one, and when
| Situation | Document |
|---|---|
| Goods returned by the buyer | Credit note |
| You charged a higher value or rate than was correct | Credit note |
| Services found deficient | Credit note |
| A discount agreed after the sale, on terms set beforehand | Credit note |
| You charged a lower value or rate than was correct | Debit note |
| Extra charges agreed after the invoice was raised | Debit note |
A useful way to remember it: a credit note is money back to the buyer, a debit note is money owed by the buyer.
Credit Note — free, no signupSales returns, discounts after sale and overcharges, linked to the invoice.What they must contain
Broadly the same particulars as a tax invoice, plus a clear link to the original:
- The word "Credit Note" or "Debit Note" on the face of it.
- Your name, address and GSTIN, and the buyer’s.
- Its own consecutive serial number and date, within the 16-character limit.
- The number and date of the original invoice it adjusts.
- The value being adjusted and the tax on it.
- Signature or digital signature.
The time limit that catches people out
You can issue a credit note whenever you like as a commercial document. But to actually reduce your tax liability with it, it has to be declared in a return by the deadline — broadly 30 November following the end of the financial year of the original supply, or the date you file the annual return, whichever is earlier.
Miss it and the note is only paperwork
A credit note declared late still adjusts what the buyer owes you commercially, but you do not get the tax back. For a return in February, that deadline is a long way off. For one in March, it is much closer than it looks.
The buyer has to play their part
A credit note only reduces your output tax if the buyer correspondingly reverses the input tax credit they claimed. If they do not, the adjustment does not stand. Under the Invoice Management System this linkage is explicit — the buyer acts on the note on the portal.
The practical consequence: tell the buyer you have issued it. A credit note nobody acted on helps nobody.
What not to do instead
- Do not delete the invoice. It exists, it has been reported, and deleting it leaves a gap in your series with no explanation. See invoice numbering rules.
- Do not edit an issued invoice to a new value. Your copy and the buyer’s copy now disagree, and the reported figures match neither.
- Do not net it off the next bill silently. Neither side can reconcile that later.
If you need to correct a bill in TracEasy today, see edit or cancel an invoice — and note that the app has no credit-note document yet, so the free generator above is the way to produce one.
Can one credit note cover several invoices?
A consolidated credit note against multiple invoices of the same buyer is permitted. Keep the linkage documented so both sides can reconcile it.
Is there a time limit on debit notes?
A debit note can be issued without the same restriction, but the buyer’s right to claim credit on it runs from the debit note’s own financial year — so issuing one very late still has consequences for them.
Do credit notes need e-invoicing?
Where e-invoicing applies to you, credit and debit notes for covered supplies are reported to the portal in the same way as invoices. See what is e-invoicing.
Sources
- CGST Act 2017, section 34; CGST Rules, Rule 53
- CBIC — GST Acts, Rules and notifications (cbic-gst.gov.in)
Free tools for this
How TracEasy handles this
Related reading
GST invoice format: what must be on the bill
The fields Rule 46 requires, with a worked example of each.
What is billing, and what is an invoice?
The document that says what was sold, for how much, and what is now owed.
GST returns explained: GSTR-1, 3B, 2B and 9
What each return is for, who files it and roughly when.