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

Gupta Pharma Pvt. Ltd. supplied goods in FY 2024-25. Some of the goods were returned by the buyer, and Gupta Pharma issued a credit note in March 2026. The annual return for FY 2024-25 was furnished on 20 December 2025. Under section 34(2), by when must the credit note be declared in a return, assuming it is issued in the stated month?

The outer limit is 30 November 2025, being the earlier of that date and the annual return filing date of 20 December 2025. A credit note issued in March 2026 is beyond this limit, so it cannot be declared to reduce the supplier's tax liability under section 34(2).

  1. AAny time, because credit notes have no time limit
  2. BIn the March 2026 return, with no outer limit
  3. CBy 30 November 2025, or the date of furnishing the annual return if earlier, so the credit note cannot be declared to reduce liabilityCorrect
  4. DBy 30 September 2025

Explanation

The credit note must be declared in the return for the month of issue but not later than 30 November following the end of the financial year of supply, or the date of furnishing the annual return, whichever is earlier. For FY 2024-25 that is 30 November 2025, which is earlier than 20 December 2025. The note issued in March 2026 falls after that deadline, so it cannot be declared to reduce liability. The 30 September option is the old date, replaced by 30 November.

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