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Credit note format

The document a seller issues to reduce what the buyer owes: goods returned, a price cut or an overcharge on the invoice.

What it is

A credit note reduces the value or tax of an invoice already issued. The seller issues it to the buyer, and both adjust their books and GST: the seller's output tax goes down, the buyer's input tax credit goes down by the same amount.

It is always linked to one or more original invoices. In billinginfo, a credit note for goods coming back is called a Sales Return (stock goes back up); a credit note for a price change with no goods returned is a Credit Note.

When to use it

  • The buyer returns goods: damaged, wrong or excess.
  • You charged a higher price or tax than agreed on the invoice.
  • The goods or services were found deficient.
  • A post-sale discount agreed before the sale and linked to specific invoices (section 15(3)(b)).

Sample credit note

A filled-in example for a fictitious business. Every total on it is worked out, not typed. Download the blank version to fill in by hand or in Excel.

Download blank PDFDownload Excel template
Ganesh TradersShop 14, Market Yard, GultekdiPune, Maharashtra 411037GSTIN: 27AAMFG1503P1Z5Phone 98220 41503accounts@ganeshtraders.example
CREDIT NOTE
Issued toAnnapurna Kirana Stores7, Karve Road, KothrudPune, Maharashtra 411038GSTIN: 27AFWPA6624L1ZY
Credit note No.
GT/CN/26-27/012
Date
10-11-2026
Against invoice
GT/26-27/0418 dated 02-11-2026
Reason
Goods returned, tin dented
#ItemHSNQtyRateGSTAmount
1Sunflower Oil, 15 L tinReturned: damaged in transit15121 tin2,040.005%2,040.00
Amount in words

Rupees Two Thousand One Hundred Forty Two Only

Taxable value₹2,040.00
CGST @2.5% on 2,040.00₹51.00
SGST @2.5% on 2,040.00₹51.00
Total₹2,142.00

The buyer should reverse the input tax credit on this amount.

For Ganesh TradersAuthorised signatory

Sample with a fictitious business · made with billinginfo

Prefer to type it? Fill a GST invoice online with our free invoice generator, or make it in the billinginfo app in a minute.

What the law asks for

Section 34(1) of the CGST Act allows the credit note; Rule 53(1A) lists its particulars. It must be declared in the return for the month it is issued, and no later than 30 November after the end of the financial year of the original supply, or the date you file the annual return, whichever is earlier (section 34(2)). After that, the GST cannot be reduced, though you may still give the commercial credit.

Your output tax goes down only if the registered buyer has reversed the matching credit. If the tax has been passed on to someone else, no reduction is allowed. Credit notes go into GSTR-1 (CDNR for registered buyers, CDNUR for some unregistered ones).

Fields on a credit note
FieldWhy it is there
Supplier name, address and GSTINRule 53(1A)(a)
Nature of the document: “Credit note”Rule 53(1A)(b)
Credit note numberRule 53(1A)(c): up to 16 characters, unique in the financial year
Date of issueRule 53(1A)(d)
Buyer name, address and GSTINRule 53(1A)(e), or state name and code for unregistered buyers
Number and date of the original invoice(s)Rule 53(1A)(g)
Taxable value, tax rate and tax creditedRule 53(1A)(h)
ReasonNot in the rule, but needed for your records
SignatureRule 53(1A)(i)

Make it in billinginfo

  1. For returned goods: + Create → Sales Return on the phone, or Sales → Sales Return tab → + New Sales Return on the web.
  2. For a price change with no goods back, choose Credit Note instead.
  3. Pick the party and link the original invoice; add the items or the amount to reduce.
  4. Save. The party's balance goes down, and stock goes back up for a sales return.
  5. The note appears in the GSTR-1 report under credit and debit notes.
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FAQ

Questions about the credit note

Something else on your mind? Write to us or see the help page.

What is the last date to issue a GST credit note?

It must be declared by 30 November after the end of the financial year of the supply, or by the annual return date if that is earlier.

Is a credit note needed for every return?

If the goods were billed on a tax invoice and you want to reduce the GST, yes.

Can I issue one credit note for many invoices?

Yes. Rule 53 allows the numbers and dates of several invoices on one note.

Who issues a credit note, buyer or seller?

Under GST, the supplier. A buyer returning goods may send a debit note or return note for their own books, but the GST adjustment is made by the supplier's credit note.

Sources

Last checked on 2 November 2026. GST rules change through notifications and circulars; if something here looks out of date, please tell us. This page explains the rules in plain words and is not legal or tax advice.

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