Reversal of invoice dated FY 21-22 in FY 22-23

[Aeka Team]

One of the customers missed the accounting of tax invoices related to FY 21-22 in their books, and now they are requesting us to reverse those invoices in the current period in our books and re-raise the invoice. Please advice if the same is possible as per GST provisions

[Raam Srinivasan Swaminathan Kalpathi]

Credit Note can be issued under provisions of Sec.34(1) and 34(2) r w r 53 provided

either there is a difference in the rate or goods mentioned are returned or where goods or services supplied are found to be deficient. None of the conditions mentioned are present. Also the last date for issue of credit note shall be 30th day of November of the subsequent year.

Your customer is bound to loose the ITC.

[Shilpi Jain]

You can re-raise but you cannot adjust the GST that you had paid earlier. You may have to pay GST again which would be a cost to you.

[Padmanathan KV]

I agree with RaamSrinivasan Sir in toto. This is not a situation prescribed for raising credit note. Further the time limit also seems to be over in this case.

AI Summary

Credit note limitations prevent GST adjustment; time limit expiry can cause ITC loss and duplicate tax payment.
Credit notes are the prescribed GST mechanism for invoice reversal but apply only where rate differences, returns, or deficient supplies exist; the statutory time limit for issuing a credit note has passed for the prior year. Therefore the customer risks losing input tax credit and GST already paid cannot be adjusted by a late credit note; reissuing invoices now may address accounting records but does not recover previously discharged GST, potentially requiring payment again and imposing a cost.