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CS Executive · Tax Laws and Practice · Procedural Compliance under GST

Under Section 34 of the CGST Act, 2017, which statement about a debit note is correct?

A debit note must be issued when the invoice understates taxable value or tax, and the Act says the term includes a supplementary invoice. It is declared in the return for the month of issue. Goods returns fall under credit notes, not debit notes.

  1. AIt must be issued when the tax invoice shows taxable value or tax less than what is payable, and it includes a supplementary invoiceCorrect
  2. BIt may be issued only when goods are returned by the recipient
  3. CIt can be issued only once for all supplies made in a financial year
  4. DIt is declared in the return for the month of the original invoice, not the month of issue

Explanation

Section 34(3) requires a debit note where the invoice shows less taxable value or tax than payable, and the Explanation says a debit note includes a supplementary invoice. Under 34(4) it is declared in the return for the month in which it is issued. Goods returns relate to credit notes, and the Act allows one or more notes.

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