Debit notes & credit notes in GST
Returns, discounts, price corrections — these are handled with credit and debit notes, not by editing old invoices. Here's how.
Once a tax invoice is issued, you don't quietly edit it. You adjust with a credit note (to reduce) or a debit note (to increase). For e-commerce, returns and price changes make these routine.
When to use each
- Credit note: goods returned, post-sale discount, overcharge, or downward price revision.
- Debit note: additional charge, undercharge, or upward price revision.
- Both reference the original invoice.
- Both flow through your GST returns.
E-commerce scenarios
High return rates in apparel and footwear mean lots of credit notes — reconcile them against marketplace settlement reports and your MTR data so your returns match.
In your returns
Report credit and debit notes in the relevant tables of GSTR-1; they adjust your output tax accordingly.
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When do I issue a credit note in GST?
For returns, post-sale discounts, overcharges or downward price revisions — always referencing the original invoice.
Can I just edit an old invoice instead?
No. Use a credit or debit note so the audit trail and returns stay consistent.
How do returns affect GST?
Returns are handled via credit notes, which reduce your output tax — reconcile them against marketplace reports.
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