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

Kaveri Engineering Ltd, a registered person, issued a tax invoice on 10 August 2024 for a supply made in FY 2024-25. In February 2025 it found that the taxable value was understated by Rs 80,000 (GST at 18%). It issues a debit note on 12 February 2025. In which return must Kaveri declare the debit note, and what is the position on tax liability?

Kaveri must declare the debit note in the return for February 2025, the month in which it was issued, and the tax liability is adjusted in the prescribed manner. The November cut-off applies only to credit notes, not to debit notes under section 34(4).

  1. AIn the return for February 2025, the month of issue of the debit note, and the tax liability is adjusted as prescribedCorrect
  2. BIn the return for August 2024, the month of the original invoice, by amending that return
  3. CIn the return for the month of issue, but only if filed on or before 30 November following the financial year
  4. DIn the annual return only, since debit notes cannot be reported monthly

Explanation

Section 34(4) requires the issuer of a debit note to declare its details in the return for the month in which it is issued, with liability adjusted as prescribed. Unlike credit notes under section 34(2), there is no 30 November time limit for debit notes. Hence the third option wrongly imports the credit note limit.

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