Credit and debit notes
Section 34, CGST Act
Straight from CBIC
Official source, not a summary of a summary
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Amendment history
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Section 34 governs CREDIT and DEBIT NOTES: a supplier issues a credit note to reduce taxable value/tax (e.g. returns, discounts, deficiency) and a debit note to increase it; credit-note adjustments have a time limit (by 30 November of the next year) and the buyer must reverse the related ITC.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
A credit note reduces your liability only if issued and declared by 30 November following the financial year of the original invoice, or the annual return, whichever is earlier – after that you can still issue a commercial credit note, but without the tax adjustment.
The reduction is allowed only if the recipient has reversed the corresponding credit – which is now evidenced through the Invoice Management System.
One credit note may cover multiple invoices; the one-to-one linkage requirement was removed in 2020.
A debit note carries NO time limit for issue, but credit on it is available only up to 30 November following the financial year of the DEBIT NOTE, not of the original invoice.
Questions people actually ask
Real questions we get on this provision, answered straight.
We need to give a rate reduction on invoices from two years ago.+
The GST credit note window has closed – you cannot reduce the tax now. Issue a commercial credit note for the value without touching the tax, and take the difference as a business cost. The buyer keeps his credit unchanged.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
2,454 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(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 7 [or where a discount referred to in clause
(b) of sub-section
(3) of section 15 is given], 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 .
(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 3 [the thirtieth day of November] 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: 6 [Provided that no reduction in output tax liability of the supplier shall be permitted, if the–
(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) 4 [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 5 [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.
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
M/s. The Cotton Corporation of India, v. Assistant Commissioner (ST) (Audit)(FAC),
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Luminous Power Technologies Pvt Ltd v. State Tax Officer,
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The State Bank of India v. The Deputy Commercial Tax Officer Jogipet Unit
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State Bank of India v. The Deputy Commercial Tax Officer
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What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
2022-10-01 · Substituted
18/2022 – CT
Substituted ( w.e.f. 1st October, 2022 vide Notification No. 18/2022 – CT dated 28.09.2022. ) by s. 102 of The Finance Act 2022 (No. 6 of 2022). for "September" …
date not stated · Substituted
Substituted for "Where a tax invoice has" by s. 15 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01 s …
date not stated · Substituted
Substituted for " a credit note " by s. 15 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st Februar …
date not stated · Substituted
Substituted for " Where a tax invoice has " by s. 15 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01 …
date not stated · Substituted
Substituted for " a debit note " by s. 15 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01 st Februar …
date not stated · Substituted
Substituted (w.e.f. 01.10.2025) by section 126 of the Finance (No. 7) Act, 2025.
date not stated · Inserted
Inserted (w.e.f. yet to be notified) by section 154 of The Finance Act, 2026 No. 4 of 2026 dated 30.03.2026.
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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