Tax Invoice; Credit and Debit Notes: formula sheet

Key formulas

Time limit for goods (Section 31)

Invoice date ≤ date of removal (goods that move); invoice date ≤ date of delivery or making available (goods that do not move)

Issue it before or at the time. It cannot wait until after the goods leave.

Time limit for services (Rule 47)

Last date = date of supply + 30 days

Insurer, banking company or financial institution including NBFC: date of supply + 45 days. The invoice may also be issued before the service.

Continuous supply of services

Due date of payment ascertainable from contract: on or before that due date. Not ascertainable: before or at the time of receiving payment. Payment linked to completion of an event: on or before completion of that event.

Three cases, each with its own trigger.

Continuous supply of goods

Invoice before or at the time each statement of accounts is issued or each payment is received

Applies where successive statements of accounts or successive payments are involved.

Supply ceasing before completion

Invoice at the time the supply ceases, to the extent of the supply made so far

Applies to services under a contract that ends early.

Goods sent on approval

Latest date for invoice = earlier of (date of supply, six months from date of removal)

This is a deadline, not a fixed invoice date. The invoice may be issued earlier. It applies where goods are removed before it is known whether a supply will take place.

Mandatory particulars (Rule 46)

Supplier name, address and GSTIN; unique serial number (maximum 16 characters); date; recipient details; HSN or SAC; description; quantity and unit (goods); total value; taxable value after discount; tax rate and amount (CGST, SGST/UTGST, IGST, cess); place of supply and state name for inter-State supply; reverse charge indication; signature

For a registered recipient, show name, address and GSTIN or UIN. For an unregistered recipient where the value of the taxable supply is ₹50,000 or more, show name, address, delivery address, and state name and code. Where the value is below ₹50,000, the unregistered recipient's details are required only if the recipient requests them.

Number of copies (Rule 48)

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

These copy requirements apply to manual or non-e-invoice documents. Notified persons issue e-invoices with an invoice reference number (IRN) and QR code under Rule 48(4).

When a credit note is issued

Taxable value or tax in invoice > value or tax actually payable; or goods returned; or services deficient

Section 34(1). Issued by a registered supplier to the recipient. A credit note or debit note refers to one or more invoices, and it normally relates to an earlier invoice.

When a debit note is issued

Taxable value or tax in invoice < value or tax actually payable

Section 34(3). Supplementary invoices are treated as debit notes for this purpose.

Time limit for credit note

Declare in the return for the month of issue, but not later than the earlier of: (a) 30th November following the end of the financial year of the supply, or (b) the date of furnishing the annual return for that year

Section 34(2). The limit applies to reducing output tax liability. The annual return is normally due on 31 December, so 30 November is usually the earlier date. If the supplier furnishes the annual return before 30 November, that earlier date is the cut-off. If the credit note is issued after the limit, the supplier gets no reduction in output tax, but the credit note still leads to the recipient reducing ITC. There is no time limit for a debit note.

Unjust-enrichment condition

Liability reduced only if incidence of tax and interest has not been passed on to the recipient or any other person

If the tax incidence has been passed on, the supplier gets no reduction in liability.

Tax on the note

Tax on note = taxable value in note × rate of tax on the original supply

Use the same rate and the same split (CGST + SGST, or IGST) as the original invoice.

Contents of the note

Heading 'Credit Note' or 'Debit Note'; supplier name, address, GSTIN; consecutive serial number, unique for the financial year; date; recipient name, address and GSTIN (if registered), and the recipient details required by Rule 53 where the recipient is unregistered; HSN code of goods or SAC of services; reference to the invoice number(s) and date(s); value of taxable supply, rate and amount of tax; signature or digital signature

Rule 53 of the CGST Rules. A shortcut for answers: note details plus the link to the invoice(s) it relates to.

Effect on ITC

Credit note: recipient's ITC is reduced correspondingly. Debit note: recipient may claim ITC subject to Section 16

The supplier declares the credit note in the return for the month of issue, and the recipient's ITC is reduced for it. The recipient's reduction does not disappear because the supplier missed the time limit for reducing output tax.

Quick revision

• Tax invoice is issued by a registered person supplying taxable goods or services under Section 31 of the CGST Act, 2017.
• Goods involving movement: invoice before or at the time of removal for supply. Otherwise: before or at delivery or making goods available.
• Services: invoice before or after provision of the service, but within the prescribed period of 30 days from the date of supply; 45 days for insurers, banks, NBFCs and other financial institutions.
• Continuous supply of goods (successive statements of account or successive payments): invoice before or at the time each statement is issued or each payment is received.
• Continuous supply of services: if the due date of payment is ascertainable from the contract, invoice on or before the due date; if it is not ascertainable, on or before the time the supplier receives payment; if payment is linked to completion of an event, on or before completion of that event.
• Invoice serial number is consecutive, may be in one or multiple series, is unique for a financial year, and may contain alphabets, numerals, hyphen and slash, up to 16 characters.
• Goods invoice is issued in three copies (recipient, transporter, supplier); services invoice in two copies (recipient, supplier).
• A registered person supplying exempt goods or services, or a composition person, issues a bill of supply instead of a tax invoice.
• Receipt voucher is issued on receiving advance; refund voucher when advance is refunded and no supply is made; payment voucher for supplies taxed under reverse charge.
• Delivery challan accompanies goods moved without a tax invoice, such as job work or supply on approval.
• Credit note: invoice value or tax is more than actual, goods are returned, or services are deficient. Debit note: value or tax charged is less than payable.
• The supplier may reduce output tax for a credit note only if the credit note is declared in the return for the month in which it is issued, not later than 30 November following the end of the financial year in which the supply was made, or the date of furnishing the relevant annual return, whichever is earlier, and only if the incidence of tax has not been passed on to another person.
• A debit note raises tax liability and includes a supplementary invoice; the recipient can claim credit on it subject to the usual conditions.

Common mistakes

• Applying 30 days to every service supplier. Fix: Attach the exception to the rule in your notes: insurers, banking companies and financial institutions including NBFCs get 45 days.
• Saying a goods invoice may be issued within 30 days of supply. Fix: For goods, the invoice is due before or at the time of removal or delivery. There is no grace period.
• Issuing a debit note when goods are returned by the buyer. Fix: Think only about the supplier's invoice. If the invoice value goes down, it is a credit note. If it goes up, it is a debit note.
• Saying a debit note must also be issued before 30th November. Fix: Section 34(2) sets a time limit only for reducing tax liability through a credit note. A debit note has no such limit. State this contrast in answers.

Exam tips

• Time-limit questions are easy marks. Memorise 30 days, 45 days and the special cases in a single list.
• Always write the section and rule number in the answer. Use Section 31 for timing and Rules 46 to 48 for particulars, timing for services and copies.
• In MCQs, watch for options that swap goods and services rules or copy counts.
• In date problems, show the month-end carry step. A correct method earns marks even if the final date slips.
• In a 'contents of invoice' question, list the particulars in a clear bullet order. Add conditions such as the ₹50,000 limit and inter-State supply.
• Write 'Section 34 of the CGST Act' at the start of every written answer on this topic. It anchors your provision-facts-conclusion format.
• For MCQs, the most tested contrast is this: the time limit and the unjust-enrichment condition in Section 34(2) apply to credit notes only. A debit note has neither under Section 34, but the recipient's ITC on a debit note is still subject to Section 16.
• In numerical questions, give the tax on the note first, then the effect on supplier's liability and recipient's ITC separately. Examiners give marks for each.