Section 34 of CGST Act 2017: Credit and Debit Notes

Provisions under Section 34 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Credit and Debit Notes”, are as under:

Section 34 of CGST Act 2017: Credit and Debit Notes (CHAPTER VII – TAX INVOICE, CREDIT AND DEBIT NOTES)

(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, 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 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 September 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 incidence of tax and interest on such supply has been passed on to any other person.

(3) 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 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.

Amendments History:

1. CBEC notifies 1st July 2017 as the Commencement date for Section 34 of the CGST Act 2017, vide Notification 9/2017 Central Tax.

2. Amendments made in Section 34 of the CGST Act, 2017, vide Section 15 of the CGST (Amendment) Act, 2018: GOI Notification dt. 30 Aug. 2018, followed with CBIC Notification on commencement date of 1st Feb. 2019 vide Notification 2/2019 Central Tax dt. 29 Jan. 2019:

a) The words ‘Where a tax invoice has’ in Section 34(1) substituted with the words ‘Where one or more tax invoices have’;

b) The words ‘a credit note’ in Section 34(1) substituted with the words ‘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) The words ‘Where a tax invoice has’ in Section 34(3) substituted with the words ‘Where one or more tax invoices have’; 

d) The words ‘a debit note’ in Section 34(3) substituted with the words ‘one or more debit notes for supplies made in a financial year’ (i.e. periodic debit notes can now be issued for multiple invoices).

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Govt. has notified the CGST Act, 2017 on 12th April, 2017, followed with Central Goods and Services Tax (CGST) (Amendment) Act, 2018 on 30 Aug. 2018. CBEC/ CBIC has subsequently issued various Notifications on commencement date of various Sections/ Provisions of the CGST/ Amendment Acts from time to time, except where specifically mentioned in the respective CGST/ Amendment Acts.

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  1. Vikram Singh

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