Tax Invoice, Credit and Debit Notes: formula sheet

Key formulas

Goods involving movement

Invoice date ≤ date of removal of goods

Issue the invoice before or at the time of removal for supply to the recipient.

Goods not involving movement

Invoice date ≤ date of delivery or making goods available

The invoice is due at or before the time the goods are delivered or made available to the recipient.

Services (general)

Invoice date ≤ date of supply + 45 days

Rule 47. Count from the date of supply of service.

Services by insurer, banking company, financial institution or NBFC

Invoice date ≤ date of supply + 30 days

Shorter period under Rule 47 for these suppliers.

Continuous supply of goods

Successive statements of accounts: invoice before or at the time each statement is issued. Successive payments: invoice before or at the time each payment is received.

Applies where goods are supplied continuously and successive statements of accounts or successive payments are involved.

Continuous supply of services

Due date known: on or before due date. Due date not known: on or before receipt of payment. Payment tied to an event: on or before completion of the event.

If the supply ceases before completion, issue the invoice at the time of cessation, to the extent supplied. A continuous supply of services runs for more than three months under a contract with periodic payment obligations.

Goods sent on approval (sale or return)

Invoice date ≤ earlier of (date supply takes place, 6 months from removal)

Applies where goods are removed before the supply takes place.

Rule 46 key particulars

Supplier name, address, GSTIN | serial number (max 16 characters, unique for the financial year) | date | recipient details | HSN or SAC | description | quantity and unit (goods) | total value | taxable value after discount | rate and amount of CGST, SGST/UTGST, IGST, cess | place of supply (with state name for inter-State) | delivery address if different | reverse charge indicator | signature or digital signature of the supplier or authorised representative

For an unregistered recipient, name, address and delivery address with state name and code are required where the invoice value is ₹50,000 or more. The number of digits of the HSN code you must show depends on the supplier's aggregate turnover: 4 digits up to ₹5 crore and 6 digits above ₹5 crore, as notified. Check the current notification.

Copies of invoice

Goods: original (recipient), duplicate (transporter), triplicate (supplier). Services: original and duplicate.

Rule 48. For e-invoiced supplies, the IRN and QR code apply.

Bill of supply

Issued by composition taxpayer or supplier of exempt goods or services in place of tax invoice

Rule 49. It shows no tax. A composition taxpayer cannot charge tax. Section 31(4) allows a single invoice-cum-bill of supply for taxable and exempt supplies to an unregistered person.

E-invoicing threshold

Aggregate turnover exceeds ₹5 crore in any preceding financial year from 2017-18

Notified persons only. Certain classes, such as SEZ units and banks, insurers and NBFCs, are exempt. Check the current notification for reporting time limits for large taxpayers.

Triggers for a credit note

Excess taxable value or tax | Goods returned | Deficiency in goods or services

These three situations are the grounds in Section 34(1). Write all three in theory answers.

Time limit for reducing output tax

Declare in the return of the month of issue, but not later than 30 November following the end of the financial year of the supply

The year is counted from the date of the original supply, not the date of the credit note. The earlier alternative of the annual return date, whichever earlier, was omitted by the Finance Act 2022. The current limit is 30 November following the end of the financial year.

Reduction in output tax

Tax reduction = Reduction in taxable value × Rate of tax

Split into CGST and SGST (or IGST) in the same way as the original invoice.

Unjust enrichment proviso

If incidence of tax and interest has been passed on to any other person → no reduction in output tax liability

This is a condition on the supplier's benefit. It is not a ground to refuse the credit note itself. The supplier cannot reduce output tax on tax it has already recovered from another person who bears it.

Effect on recipient

Recipient reduces ITC by the tax shown in the credit note, as reflected in GSTR-2B (if ITC was taken)

The recipient's ITC is reduced in line with the credit note reflected in their return, as required by Section 34 and the prescribed rules.

Quick revision

• A tax invoice is the main document for a taxable supply by a registered person.
• Check the time limit for the invoice by type of supply, from the date of supply or service.
• A receipt voucher is issued when an advance is received for a supply.
• A refund voucher is issued when an advance is refunded and no supply takes place.
• A delivery challan is used when goods move without a tax invoice, as the rules allow.
• A credit note reduces taxable value or tax on an earlier invoice, for example for returns or discounts.
• A credit note has a statutory time limit and conditions before output tax can be reduced.
• The recipient must reduce input tax credit when a credit note is received.
• A debit note is issued when taxable value or tax increases on an earlier invoice.
• A debit note increases output tax liability and may give the recipient more credit.
• Always check dates, registration status of the parties and the type of supply before answering.

Common mistakes

• Applying the 45-day limit to goods. Fix: The 45 days applies only to services. For goods, the invoice is due at or before removal or delivery.
• Forgetting the 30-day limit for banks, insurers, financial institutions and NBFCs. Fix: Check the supplier's nature first. If it is a financial services provider, use 30 days.
• Counting the time limit from the date of the credit note or from the end of the financial year of issue. Fix: Always start from the financial year of the original supply, then move to 30 November after that year ends.
• Saying a credit note can be issued for any reason, such as to settle a dispute or give a gift. Fix: Tie it to the three grounds: excess value or tax, goods returned, or deficiency.

Exam tips

• Write the rule first, then apply the facts, then conclude. Examiners give marks for each step.
• Show date arithmetic in full. State the day count and the month-end dates so a wrong final date can still earn step marks.
• In MCQs on time limits, check the supplier type first. The 30-day exception for financial services is a common trap.
• When a question mentions a composition dealer or exempt supplier, name the bill of supply and say that no tax is charged.
• For e-invoicing questions, state the turnover test, say that notified exempt classes exist, and mention the IRN and QR code.
• Write the three grounds for a credit note first. Examiners award marks for the list.
• In any case with dates, compute the deadline explicitly: financial year of the supply, then 30 November after it ends.
• Always show tax reduction as reduced taxable value × rate, with the CGST/SGST or IGST split.