Credit Note in GST [Section 34(1) & 34(2)]

Credit note in GST reduces supplier output tax liability when matched with recipient input tax reversal.

A credit note under GST allows a supplier to amend taxable value or tax where an earlier tax invoice overstated tax, goods are returned, or supplies are deficient; it must contain prescribed particulars and, when declared in the supplier's return within the statutory time limit, reduces the supplier's output tax liability subject to conditions. Reduction is permitted only where the recipient's corresponding reversal or non claim of input tax credit matches the supplier's claim; discrepancies or duplications communicated through the matching process may be added back to the supplier's output tax. Records must be retained for seventy two months.