Credit note in case of supply fall under RCM

[milan bamal]

Dear team

I had issued a sale invoice under RCM,

also generated the e-invoice

but the taxable value was reported higher by mistake in GSTR-1 of April 26.

How can I reduce/correct it? Can a credit note be issued for supplies covered under Reverse Charge Mechanism (RCM)? Or anything else

[KALLESHAMURTHY MURTHY K.N.]

Sir,

You can use Form GSTR-1A to rectify the RCM turnover wrongly reported if GSTR-3B is not filed. The corrected values will flow into your GSTR-3B for the respective month.

If you have already filed the GSTR-1, you can amend it in a subsequent month. Open the GSTR-1 return for April 2026 in the GST portal, select Table 4B - Supplies attracting reverse charge (Amendment) and fill the required field appearing therein, effect changes and submit.

 

[YAGAY and SUN]

Yes. A credit note can be issued even in respect of supplies liable to Reverse Charge Mechanism (RCM), provided the original taxable value or tax charged exceeds the correct amount. Section 34 of the CGST Act does not carve out any exception for RCM supplies. Since the excess taxable value was reported in GSTR-1 due to an error, you may issue a GST credit note for the differential amount and report the same in the subsequent GSTR-1 within the prescribed time limit. Corresponding adjustment may also be reflected in GSTR-3B. Since tax under RCM is payable by the recipient, the commercial correction through credit note remains legally permissible.

However, because an e-invoice has already been generated, the correction route depends upon timelines. If the IRN cancellation window (presently 24 hours) has expired, the original e-invoice cannot be cancelled. In such case, issuance of a proper GST credit note linked to the original invoice is the correct statutory mechanism. Care should be taken that the recipient correspondingly reverses excess RCM liability/ITC, wherever already accounted for. Mere amendment in GSTR-1 without documentary backing is not advisable where an IRN-backed invoice already exists.

[Sadanand Bulbule]

Replies are welcomed.

[Ryan Vaz]

Yes, a credit note can be issued even for supplies covered under RCM if excess taxable value was originally invoiced/reported.

However, the correct course depends on where the mistake occurred:

Situation	Recommended Action
Invoice itself incorrect	Issue GST credit note
Invoice correct but only GSTR-1 wrongly reported	Amend/adjust through GSTR-1 amendment table
E-invoice incorrect	Credit note generally advisable

If the taxable value in the actual invoice was also excess, then issuing a credit note is the safest and cleanest approach.

[Kashish Gupta]

To correct an inflated taxable value reported in GSTR-1 of April 2026, three remedies are available. First, if GSTR-3B is not filed, said value can be amended through Form GSTR-1A of April 2026. Secondly, assuming GSTR-3B has already been filed and the GSTR-1A window is closed, the correction must be carried forward by reporting an amendment to the original invoice in Table 9A of the subsequent month's GSTR-1 (i.e., May 2026 GSTR-1), which allows the supplier to report the revised taxable value. The differential will reduce the output tax liability accordingly. The time limit for such amendments is 30th November of the succeeding financial year or the date of filing of the annual return (GSTR-9), whichever is earlier.

Thirdly, on the specific question of whether a Credit Note can be issued for an RCM supply: yes, it can be issued where the e-invoice has already been generated and the cancellation window (typically 24 hours on the IRP) has lapsed. A credit note linked to the original RCM invoice must be issued under Section 34 of the CGST Act for the excess taxable value and the IRN for the credit note should also be generated on the IRP since the original transaction was e-invoiced.

[Shilpi Jain]

Better to issue a credit note since e invoice is already generated.

Issue the proper invoice by selecting liability under RCM and proper disclosure in the returns.

It is coming out that the e invoice itself has the wrong higher amounts which is why GSTR-1 has a higher figure

AI Summary

Reverse charge credit notes permit correction of excess taxable value through GST amendments and linked e-invoicing compliance.
An inflated taxable value reported for a supply under reverse charge mechanism may be corrected through GSTR-1A if GSTR-3B has not been filed, or through amendment in a subsequent GSTR-1 if it has already been filed. A credit note may also be issued for an RCM supply where the original taxable value or tax charged exceeds the correct amount, since Section 34 of the CGST Act does not exclude RCM supplies. Where an e-invoice has been generated and the IRN cancellation window has expired, a linked credit note is the appropriate mechanism.