Key points
- Deadline: declare a credit note in the return for the month it is issued, and not later than 30 November after the financial year of the supply, or the annual return date if earlier (section 34(2)).[1]
- For FY 2025-26 sales: 30 November 2026, unless you file the FY 2025-26 annual return earlier.[1]
- Since 1 October 2025: no reduction in your output tax if a registered buyer has not reversed the ITC on the credit note (proviso to section 34(2)).[1]
- IMS: your credit note goes to the buyer's IMS; if rejected, your liability goes back up.[2]
- ₹10 Cr+ businesses: e-invoiced credit notes must reach the IRP within 30 days of their date.[3]
When you issue a credit note
Section 34(1) lets a supplier issue a credit note when the taxable value or tax on an invoice was too high, when goods are returned, or when goods or services turn out to be deficient.[1] Discounts after the sale are covered through section 15(3)(b), with its own conditions; see our scheme discounts guide.[4] Finance Act 2026 adds post-sale discounts to section 34(1) expressly, from a date not yet notified.[1]
Working out your deadline
| Supply made in | Last date to declare a credit note | Unless annual return filed earlier |
|---|---|---|
| FY 2024-25 | 30 November 2025 (passed) | Annual return date, if earlier |
| FY 2025-26 | 30 November 2026 | Annual return date, if earlier |
| FY 2026-27 | 30 November 2027 | Annual return date, if earlier |
"Declare" means report it in GSTR-1 (or IFF) for the month it is issued, and adjust the tax in GSTR-3B. A credit note dated 28 November 2026 but reported only in December's GSTR-1 misses the limit. Monthly filers should treat the October 2026 GSTR-1, due 11 November, or the November GSTR-1 filed by 30 November, as the last safe returns for FY 2025-26 credit notes. तपासा
The 1 October 2025 change: the buyer must reverse
The proviso to section 34(2), in force from 1 October 2025, says the supplier's output tax is not reduced if the ITC attributable to the credit note, if availed, has not been reversed by the recipient (when the recipient is registered), or, in other cases, if the tax has been passed on to someone else.[1] In practice this happens through IMS: when your buyer accepts the credit note, its ITC is reduced in its GSTR-2B and 3B; since the October 2025 period, the buyer can also declare how much ITC it actually took, so the reversal matches.[2][5]
Rejected credit notes push your liability back up in your next GSTR-3B.[2] So send every credit note with a short note to the buyer's accountant asking them to accept it in IMS, well before 30 November.
After the deadline
Once the limit passes, a credit note can no longer reduce your GST on that supply. Businesses then usually issue a commercial (financial) credit note, which settles the account but carries no GST adjustment.[6] तपासा Agree the approach with your CA.
Worked example, in rupees
Nair Hardware Distributors, Kochi (sample firm), turnover ₹14 Cr, has three pending adjustments on 17 October 2026, all on FY 2025-26 bills:
| Adjustment | Taxable value | GST 18% | Action and date |
|---|---|---|---|
| Goods returned on bill of 12-03-2026 | ₹1,20,000 | ₹21,600 | Issue CN by 31-10-2026; report in October GSTR-1 |
| Rate charged wrongly on bill of 20-02-2026 | ₹45,000 | ₹8,100 | Issue CN now; e-invoice it within 30 days of its date |
| Year-end target discount agreed in April 2025 | ₹80,000 | ₹14,400 | Issue CN linked to the invoices; buyer to accept in IMS |
| Total | ₹2,45,000 | ₹44,100 |
If all three are declared in time and the buyers reverse the ITC, Nair's output tax falls by ₹44,100. Miss 30 November 2026 and the ₹44,100 stays payable, even though the goods came back. Because Nair's turnover is above ₹10 crore, each credit note must also get its IRN within 30 days of the credit note's date.[3]
Before 30 November 2026
- List all sales returns, rate corrections and agreed discounts on FY 2025-26 bills that have no credit note yet.
- Issue the credit notes, each linked to its original invoice.
- E-invoice them within 30 days of their date if your turnover is ₹10 crore or more.
- Report them in GSTR-1 or IFF for the month of issue, before the limit.
- Ask each buyer to accept them in IMS; follow up on any kept pending or rejected.
- Check you are not filing the FY 2025-26 annual return before reporting them, since that date can come first.
How Moharbill helps
- Credit notes are made from the original bill, so the link and the tax head are right. Each shows the days left before its deadline.
- Credit notes get their IRN on save, with the 30-day count for ₹10 Cr+ firms. See e-invoice software.
- GSTR-1 working includes every credit note of the month; see GST returns.
Frequently asked questions
What is the time limit for a GST credit note?
Under section 34(2) of the CGST Act, a credit note must be declared in the return for the month it is issued, and not later than 30 November following the end of the financial year of the supply, or the date of filing the annual return, whichever is earlier.
What is the last date for credit notes on FY 2025-26 sales?
30 November 2026, or the date you file the FY 2025-26 annual return if that is earlier.
Does the buyer need to reverse ITC for my credit note to count?
Yes, from 1 October 2025. The proviso to section 34(2) says there is no reduction in the supplier's output tax if a registered recipient has not reversed the ITC attributable to the credit note.
Does the 30-day e-invoice rule apply to credit notes?
Yes, for businesses with aggregate annual turnover of ₹10 crore or more: invoices, credit notes and debit notes must be reported to the IRP within 30 days of their date.
What if I miss the credit note deadline?
The credit note can no longer reduce your GST on that supply. A commercial credit note without GST can still settle the account; ask your CA how to record it.
Sources
All read on 17 Oct 2026.
- CGST Act 2017, section 34 with notes (30 November from 1 Oct 2022; proviso substituted w.e.f. 01.10.2025; Finance Act 2026 insertion not yet notified), CBIC. taxinformation.cbic.gov.in
- GSTN, advisory on the Invoice Management System (credit notes; supplier liability when rejected). tutorial.gst.gov.in
- IRIS IRP (einvoice6), 30-day reporting limit for AATO ₹10 crore and above, covering invoices, credit notes and debit notes from 1 Apr 2025. einvoice6.gst.gov.in
- CGST Act 2017, section 15(3), CBIC. taxinformation.cbic.gov.in
- GSTN advisory of 23 Sep 2025 on IMS changes (ITC reduction amount), as summarised by EY India. Secondary source. ey.com
- CBIC Circular No. 92/11/2019-GST, 7 Mar 2019. cbic-gst.gov.in
Moharbill टीमने लिहिले
आम्ही Hexa Secure Labs मध्ये डिस्ट्रिब्युटरसाठी GST बिलिंग बनवतो आणि प्रॉडक्टमध्ये जे नियम कोड करतो त्यांच्यावरूनच या मार्गदर्शिका लिहितो. काही जुने दिसले? आम्हाला सांगा, आम्ही दोन कामकाजाच्या दिवसांत दुरुस्त करू.