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CA Final · Indirect Tax Laws · Tax Invoice, Credit and Debit Notes

Bharat Components Ltd supplied goods to Kiran Auto Ltd under three separate tax invoices in FY 2024-25. It later found the taxable value on all three invoices was overstated. Which statement is correct under section 34 and Rule 53(1A)?

One or more credit notes may be issued for supplies made in a financial year, and each credit note must give the serial numbers and dates of the corresponding tax invoices. Section 34(1) refers to one or more invoices, and Rule 53(1A)(g) requires the invoice references.

  1. AA separate credit note must be issued for each invoice, and a single credit note covering several invoices is not permitted
  2. BOne or more credit notes may be issued for supplies made in a financial year, and a credit note must show the serial numbers and dates of the corresponding tax invoicesCorrect
  3. CA credit note may be issued only if the recipient is unregistered, because registered recipients must be given a revised tax invoice
  4. DA credit note must carry the words 'INPUT TAX CREDIT NOT ADMISSIBLE' in every case

Explanation

Section 34(1) refers to one or more tax invoices and allows one or more credit notes for supplies in a financial year, so one note can cover several invoices. Rule 53(1A)(g) requires the serial number(s) and date(s) of the corresponding tax invoice(s). The ITC-not-admissible legend applies only to documents issued under sections 74, 129 or 130.

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