CGST Section 34: Credit and Debit Notes

Provisions under Section 34 of the CGST Act 2017 relating to “Credit and Debit Notes”:

Section 34: Credit and Debit Notes (CHAPTER VII: TAX INVOICE, CREDIT AND DEBIT NOTES) [*1]

(1) Where one or more tax invoices have [*2(a)] 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 one or more credit notes for supplies made in a financial year [*2(b)] containing such particulars as may be prescribed.

(2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than the thirtieth day of November [*3] following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:

Provided that no reduction in output tax liability of the supplier shall be permitted, if the- [*4]

(i) input tax credit as is attributable to such a credit note, if availed, has not been reversed by the recipient, where such recipient is a registered person; or

(ii) incidence of tax on such supply has been passed on to any other person, in other cases.

(3) Where one or more tax invoices have [*2(c)] 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 one or more debit notes for supplies made in a financial year [*2(d)] 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.

Notes (History of Amendments in Bare Text):

1. CGST Section 34 introduced vide GOI Notification dated 12/04/2017, followed with CBEC Notification 9/2017 on commencement date of 01/07/2017.

2. Amendments vide Section 15 of the CGST (Amendment) Act, 2018, followed with Notification 2/2019 on commencement date of 01/02/2019:

(a) In sub-section (1), the text ‘Where a tax invoice has’ substituted with the text ‘Where one or more tax invoices have’.

(b) In sub-section (1), the text ‘a credit note’ substituted with the text ‘one or more credit notes for supplies made in a financial year’ (i.e. periodic credit notes can now be issued for multiple invoices).

c) In sub-section (3), the text ‘Where a tax invoice has’ substituted with the text ‘Where one or more tax invoices have’.

d) In sub-section (3), the text ‘a debit note’ substituted with the text ‘one or more debit notes for supplies made in a financial year’.

3. In sub section (2), the text “September” substituted with the text “the thirtieth day of November” vide Section 102 of the Finance Act 2022, followed with Notification 18/2022 on commencement date of 01/10/2022.

4. In sub section (2), the proviso substituted vide Section 126 of the Finance Act 2025, commenced from 01/10/2025 vide Central Tax Notification 16/2025. Text thereof before substitution:

“Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.”