TaxTMI 
TaxTMI 
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
Reversal of invoice dated FY 21-22 in FY 22-23
23 Feb 2024 
3 Replies 
1115 Views Asked by
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. (AI Summary)
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. (AI Summary)