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

Dhanvi Traders, a registered supplier, issued a tax invoice in August 2024 (financial year 2024-25) for goods. In January 2025 the recipient returned part of the goods. Under section 34 of the CGST Act, 2017, by what latest date must the supplier declare the credit note in its return so that it can reduce its output tax liability?

The credit note must be declared in the return for the month of its issue, but not later than 30 November following the financial year of the original supply, or the date of furnishing the relevant annual return, whichever is earlier. September was the old limit, replaced from October 2022.

  1. AThe 30th day of September following the end of the financial year, or the date of furnishing the annual return, whichever is earlier
  2. BThe 30th day of November following the end of the financial year in which the supply was made, or the date of furnishing the annual return, whichever is earlierCorrect
  3. CThe 30th day of November following the end of the financial year in which the credit note is issued, or the date of the annual return, whichever is later
  4. DThe 20th day of the month following the month of issue of the credit note, with no outer limit

Explanation

Section 34(2) requires the credit note to be declared in the return for the month of issue, but not later than the thirtieth day of 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. September was the earlier limit, replaced from 1-10-2022. The 'later' option reverses the rule and the base year.

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