Under CGST Act, Sec 34(1) states the three position in which supplier may issue the credit note to the recipient which are as follows: Where taxable value or tax payable exceeds Where the goods returned by the recipient Where the supplies found to be deficient. From the above it is clear that credit note shall be issued by the supplier. Further, Sec 34(2) clears when the registered person who issues a credit note shall declare The details of credit note in his monthly return But not later than September following the end of financial year in which supplies made or date of furnishing of relevant annual return whichever is earlier and Consequently tax liability reduced. Above provision indicates that it is not mandatory to issue the credit note on monthly basis. It can be issued later and mandatory to declare the annual return otherwise tax liability can’t be reduced. Sec 34(3) specify the condition when supplier issues the debit note which is as follows: Where taxable value or tax charged in tax invoice founds to be less than the taxable value or tax payable in respect of supply From the above it is clear that credit note shall be issued by the supplier. Sec. 34(4) states that the registered person who issues a debit note 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 accordingly.
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