Credit Note entered Twice my mistake need resolution

[Rishabh Pal]

Hello Sir/Madam,

In January 2025, my client had returned some goods to his creditor, he raised a sale bills, e invoice and E way bill for movement of goods, but the creditor issued a Credit note for the same, and filled it in his GSTR-1, i had to reverse my ITC otherwise my ITC will get overclaimed.

so technically it became a double effect on a single bill

Now how can i issue a credit note for my bill, because there is no actual movement of goods

e invoice is applicable to me whether i have to make to e way bill for the same, as there is no movement of goods

[Sadanand Bulbule]

Since there is no actual movement of goods, you can issue a debit note purely for GST correction purposes and report it in your GST returns. No e-way bill is needed, but an e-invoice is mandatory if you are in the e- invoicing category.  Rule 138 of the CGST Rules does not apply to such situation.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

You are required to reduce ITC by issuing a debit note. If goods are already returned, and there is no further occasion for movement of returned goods, the e-Way Bill need not be issued, but to follow the procedure of e-invoicing.

[Vijay kumar]

Return of goods should have been done under a Delivery Challan and EWB instead of sales invoice. As per sn.34, CN was required to be raised by the supplier and he you were supposed to reverse the ITC against the CN. Please read Sn. 34(3), whereby in my view, Debit Note is not meant for your situation. In any case, if reversal is already made by way of tax invoice in Jan 25, there seems to no need for reversal again. 

Credit and debit notes.

34. (1) 1[Where one or more tax invoices have] been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient 2[one or more credit notes for supplies made in a financial year] containing such particulars as may be prescribed.

....

(3) 3[Where one or more tax invoices have] been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient 4[one or more debit notes for supplies made in a financial year] containing such particulars as may be prescribed.

(4) Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.

Explanation.––For the purposes of this Act, the expression “debit note” shall include a supplementary invoice. 

[Shilpi Jain]

if on return of the goods the original supplier has issued credit note, you can now issue credit note for the invoice issued during the return of the goods. Since there is no supply for this movement.

AI Summary

Debit note requirement: adjust input tax credit and report correction in GST returns; e-invoice may be required but no e-way bill. Where a supplier has issued a credit note for returned goods but the recipient claimed input tax credit on the original invoice, the recipient must reduce the ITC by issuing a debit note or otherwise adjusting GST records and declare that correction in the GST return for the month of issuance. An e-invoice is mandatory if the person is in the e-invoicing category, but an e-way bill is not required where there is no physical movement of goods. Corrective documents must be reported and tax liabilities adjusted as prescribed.