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Key takeaways
- Only the registered supplier issues a GST credit note, under section 34(1) of the CGST Act.
- The deadline is 30 September following the end of the financial year of the supply, or the date of the annual return, whichever is earlier.
- The supplier can cut its output tax only if the tax burden has not passed to the recipient, or the recipient has reversed the matching credit.
- Rule 53 sets the content, including a sequential number of up to 16 characters.
Free PDF and Excel: GST credit note template and deadline tracker. Get it below
Credit note under GST
A GST credit note is a document issued by a registered supplier to its recipient that reduces the taxable value or the tax on an earlier invoice, under section 34 of the CGST Act.
The general idea of a credit note is on our credit note page. This page is about the Indian tax rules around it. They matter because the credit note changes tax in two returns: the supplier's output tax and the recipient's input tax credit.
A supplier invoices INR 2,00,000 plus 18 percent GST, a total of INR 2,36,000. After delivery the buyer rejects goods worth INR 50,000. In April the supplier issues a credit note for INR 50,000 plus INR 9,000 GST, citing the invoice.
The supplier declares it in the return for April and reduces its output tax. The buyer, who took credit on the original invoice, reverses INR 9,000 of credit.
Rules at a glance
| Point | Rule under section 34 and rule 53 |
|---|---|
| Who issues | The registered supplier. The recipient cannot issue a credit note |
| Deadline | Earlier of 30 September following the financial year of the supply, and the date the annual return is furnished |
| Reporting | In the return for the month in which the credit note is issued |
| Output tax reduction | Allowed only if the tax incidence has not been passed on to the recipient |
| Number | Consecutive, unique in the financial year, up to 16 characters |
| Content | Supplier details, original invoice number and date, taxable value, tax rate and amount, signature |
Free PDF and Excel
GST credit note template and deadline tracker
A GST credit note layout with rule 53 fields, plus a tracker that shows the days left before the section 34 deadline.
- Credit note layout
- Section 34 summary
- Deadline tracker
- Excel tracker that counts days to 30 September
Fields on the note
| Field | What goes in it | Why it matters |
|---|---|---|
| Supplier name, address, GSTIN | Registered details. | Identifies the issuer. |
| Credit note number and date | Consecutive number up to 16 characters, date of issue. | Date decides the return period. |
| Recipient details | Name, address and GSTIN if registered. | Needed for their credit reversal. |
| Original invoice | Number and date. | Links the adjustment. |
| Taxable value and tax | Amount reduced, rate and tax. | Must reconcile. |
| Signature | Of the supplier or authorised person. | Required particular. |
Practical points
- Issue the note before the deadline. After it, the supplier cannot reduce output tax through that note.
- Tell the recipient. If it does not reverse its credit, the supplier's relief may be refused.
- For e-invoicing taxpayers, check how credit notes are reported on the invoice portal. See e-invoice in GST.
- The opposite document is the GST debit note.
- Keep the credit note with the original invoice. See GST tax invoice for the invoice rules.
- The original invoice number and date are cited.
- The deadline has not passed.
- The tax rate matches the original invoice.
- The number is in sequence.
- The recipient has been told to reverse credit.
- The note will be reported in the right month.
Last checked: 19 October 2026. Checked against a published summary of section 34 of the CGST Act and rule 53. Confirm the current text and any recent amendments with a chartered accountant.
Frequently asked questions
Who can issue a credit note under GST?
The registered supplier who made the original supply. The recipient cannot issue a credit note.
What is the time limit for a credit note?
The earlier of 30 September following the end of the financial year in which the supply was made and the date the supplier furnishes the annual return.
Can the supplier always reduce its tax with a credit note?
Only if the tax incidence has been passed on to the recipient and not otherwise recovered. If the recipient does not reverse its input credit, relief can be denied.
Where is the credit note reported?
In the supplier's return for the month in which the credit note is issued.
What if the deadline is missed?
The supplier loses the ability to reduce its output tax through the credit note. Ask your adviser about alternatives.