Skip to content

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

Verma Pharma Ltd. is a registered supplier. It issued one credit note covering goods returned against three separate tax invoices raised during the same financial year to the same registered recipient. Which statement is correct as per the CGST Act and Rules?

The credit note is valid. Section 34 allows one or more credit notes to be issued against one or more tax invoices for supplies made in a financial year, and the rules require the serial numbers and dates of all corresponding tax invoices to be shown in the credit note.

  1. AThe credit note is invalid, since a separate credit note is required for each invoice
  2. BThe credit note is valid, as one or more credit notes may be issued for supplies made in a financial year, and it must carry the serial numbers and dates of the corresponding tax invoicesCorrect
  3. CThe credit note is valid only if the three invoices were issued in the same month
  4. DThe credit note is valid only if it carries a single invoice number and the other invoices are cited in the annual return

Explanation

Section 34(1) as amended allows one or more credit notes in respect of one or more tax invoices for supplies made in a financial year. Rule 53(1A)(g) requires the serial number(s) and date(s) of the corresponding tax invoice(s) to be stated. No same-month condition exists in the text.

Did you get it right without looking?

One question tells you little. A timed set on Tax Invoice, Credit and Debit Notes shows your real accuracy, how long you take and where you lose marks.

Practise Tax Invoice, Credit and Debit NotesFree diagnostic mock

More Tax Invoice, Credit and Debit Notes questions