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

Kaveri Engineering Ltd, a registered person, made a taxable supply in the financial year 2023-24 and issued a tax invoice. Goods worth part of the invoice were returned by the buyer, so Kaveri issued a credit note on 10 October 2024. Which statement correctly reflects the time limit for declaring this credit note under section 34(2)?

The credit note must be declared in the return for the month of issue, October 2024, and not later than 30 November following the end of the financial year of the supply, or the annual return date, whichever is earlier. The September limit was replaced by November.

  1. AIt may be declared at any time, since no time limit applies to credit notes
  2. BIt must be declared in the return for October 2024, and not later than 30 November following the end of the financial year 2023-24, or the date of furnishing the relevant annual return, whichever is earlierCorrect
  3. CIt must be declared not later than 30 September following the end of the financial year 2023-24
  4. DIt must be declared in the return for the month of the original supply, which is 2023-24

Explanation

Section 34(2) requires declaration 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 annual return, whichever is earlier. The September deadline was replaced by November with effect from 1-10-2022. For a 2023-24 supply, the cut-off is therefore 30 November 2024, and the October 2024 declaration is within it.

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