A customer returns goods that were defective. You overcharged a client on last month’s invoice and they’ve flagged it. You agreed to give a post-delivery discount after the invoice was already raised. In all three cases, you can’t just edit the original invoice — under GST law, a tax invoice is a legal document. What you issue instead is a credit note.
Fill in the original invoice number, the reason, and the corrected amount below. Download the PDF.
What a credit note actually does
A credit note is a negative invoice. It reduces the taxable value and tax amount from a previous supply. When a GST-registered seller issues a credit note, two things happen: the seller’s outward tax liability for that period goes down, and the buyer’s input tax credit (ITC) — which they already claimed on the original invoice — gets reversed proportionally.
This is why credit notes have to be handled carefully. Issuing one isn’t just paperwork between you and the buyer. It affects both parties’ GST returns.
When you must issue a credit note
GST law specifies the situations where a credit note is valid:
- Goods are returned by the recipient
- The supply is found to be deficient in quantity or quality
- The value of supply is reduced post-invoice (a discount agreed after the original invoice)
- The supply was cancelled after invoicing
- There was an error in the original invoice that overstated the amount
A credit note cannot be used to adjust a genuine underpayment by the buyer. That requires a debit note raised by the buyer, or a revised invoice if the error is caught quickly.
Deadline to issue a GST credit note
This is the part most people miss. Under GST, a credit note for a supply made in a financial year must be issued no later than:
- 30 September of the following financial year, or
- The date of filing the annual return (GSTR-9) for that year
whichever is earlier.
So if you invoiced something in October 2025 and a return happens in August 2026, you can still issue the credit note before September 30, 2026. But if you’re trying to issue a credit note in November 2026 for a March 2026 supply, you’ve missed the window for tax adjustments. You can still settle the commercial dispute with the buyer, but the GST component can no longer be adjusted.
What goes on a GST credit note
A valid GST credit note needs: your GSTIN, the buyer’s GSTIN (if registered), the original invoice number it relates to, the date of the credit note, a description of the goods or services being credited, the original taxable value, the amount being reduced, the tax (CGST/SGST or IGST) on that reduction, and the net credit amount.
In the generator above, use the line item description to describe what’s being adjusted (“Return of 5 units of XYZ as per invoice #INV-2026-041”), set the amount to the credit amount, and pick the correct GST mode matching the original invoice.
Credit note vs revised invoice
If you catch an error on an invoice within the same month it was raised and before you’ve filed GSTR-1, you can issue a revised invoice instead. A revised invoice replaces the original, it doesn’t reduce from it. Credit notes are for after-the-fact adjustments, especially once the original invoice has already been reported in a GST return.
Related: GST invoice template for the original invoice format, and the GST calculator to verify the tax amounts before issuing.