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”:

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 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: [Refer Note 3]

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 01/07/2017 as the Commencement date for Section 34 of the CGST Act 2017, vide Central Tax Notification 9/2017 dt. 28/06/2017.

2. Amendments made in Section 34 of the CGST Act, 2017, vide Section 15 of the CGST (Amendment) Act, 2018 (GOI Notification dt. 29/08/2018), followed with Central Tax Notification 2/2019 dt. 29/01/2019 on commencement date of 01/02/2019:

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).

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: GOI Notification dt. 30/03/2022. Subsequently, CBIC notifies 01/10/2022 as the commencement date vide Central Tax Notification 18/2022.

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Note: The CGST Act 2017 has been notified vide GOI Notification dt. 12/04/2017, which has subsequently been amended through CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020, Finance Act 2021, Finance Act 2022 including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of Amendments made by all such Notifications, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.