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

Mehta Industries, Surat, issued a tax invoice on 10 June 2024 (FY 2024-25) at a value lower than the correct taxable value. It discovers the error and issues a document on 5 February 2025 to charge the additional tax. Which statement is correct as per section 34 of the CGST Act?

Mehta Industries must issue a debit note, which includes a supplementary invoice, and declare it in the return for February 2025, the month of issue. Section 34(4) links declaration to the month in which the debit note is issued, not the original invoice month.

  1. AIt must issue a debit note, and declare it in the return for the month in which the debit note is issued, i.e. February 2025Correct
  2. BIt must issue a debit note, and declare it in the return for June 2024, the month of the original invoice
  3. CIt cannot issue a debit note after the end of the quarter in which the invoice was issued
  4. DIt may issue a credit note with a negative value

Explanation

Under section 34(3), where the taxable value or tax charged is less than that payable, the supplier shall issue a debit note. Under section 34(4) it is declared in the return for the month in which the debit note is issued, so February 2025. Option B is wrong because it ties the declaration to the month of the original invoice. No quarter-based bar appears in the text.

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