Section 34: GST Debit Note – Meaning, Issuance and ITC Rules

Summary: A debit note under GST is issued when the invoice value is lower than the actual value of goods or services supplied. It is applicable in cases where the actual supply value exceeds the invoiced value, tax is charged at a lower rate, or a higher quantity is supplied than mentioned in the invoice. Only a registered supplier can issue a debit note, while the recipient cannot. There is no time limit for issuing a debit note under GST, and it applies to taxable, exempt, and nil-rated supplies. Upon issuance, the supplier’s output tax liability increases, and the recipient can claim Input Tax Credit (ITC). ITC on a debit note can be claimed up to November 30 of the next financial year or the date of filing GSTR-9, whichever is earlier. If this period expires, ITC cannot be claimed and must be reported in Table 4D(2) of GSTR-3B. A debit note is not linked to the original invoice for ITC claims; the claim period is based on the debit note’s issuance date, not the invoice date.

Section 34: Debit note in GST

1. Meaning of Debit note:

It will be issued when value reported in the invoice is lesser than the actual value of goods or services supplied etc.

2. Circumstances for issuing of a debit note:

a. Actual value of supply of goods or services supplied exceeds the value reported in the invoice.

Example:-

Actual value of goods or services supplied is Rs 1,00,000 & GST rate is 18%.

In the tax invoice, supplier mentioned taxable value 90,000 & charged GST accordingly.

Now, he will raise the debit note of Rs 10,000 and charged the GST 1,800.

b. Tax charged in the invoice is lesser than the actual liability (GST charged at lower rate in the invoice).

Example:

Actual value of goods or services supplied is Rs 1,00,000 & GST rate is 28%.

In the tax invoice, supplier mentioned Taxable value 1,00,000 & charged GST @18%.

Now, he will raise the debit note of Rs 10,000 for recovering the GST or he can amend the original invoice.

c. Quantity supplied to the recipient is higher than the quantity mentioned in the invoice.

d. Any other similar reasons.

3. Authority for issuing of a debit note:

a. Only registered supplier under GST can issue debit note to the recipient to whom goods or services supplied.

b. Recipient cannot issue debit note under GST Act.

4. Time limit for issuing:

As per GST Act, there is no time limit for issuing of debit note. Whenever situations arises, supplier can issue debit note to the recipient.

5. Nature of supplies:

a. It can be issued for taxable supplies.

b. It can be issued for exempt supplies.

c. It can be issued for nil rated supplies.

6. Treatment in Supplier return:

After issuing of a debit note, output liability of the supplier will be increase.

7. Treatment in recipient return:

After issuing of a debit note by supplier, recipient can claim the ITC.

In case of a debit note, output liability & ITC of the supplier & recipient will always increase, respectively.

8. Time limit for claiming the ITC:-

As per Sec 16(4), recipient can claim the ITC upto a specified period:

a) 30^th November of next financial year

Or

b) Date of filing of GSTR-9 i.e annual return.

Whichever is earlier.

9. Reporting in GSTR-3B:

If time period for claiming the ITC has been expired, in such cases recipient can not claim the ITC and it will be report in table-4D(2) of GSTR-3B.

10. Linking with original invoice:

a. If invoice was issued in the FY 22-23 & DN was issued in the year 24-25 then time period of claiming the ITC will be 30^th November 2025 or date of filing of GSTR-9 i.e annual return whichever is earlier. There is no link of debit note with the original invoice when it was issued.

b. Time period for availment of ITC is depend on the date of debit note when it was issued not when the invoice was issued.

Hence, there is no link of debit note with the invoice for the purpose of availment of ITC.

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Disclaimer: The views & opinions expressed in this article are solely those of the author. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation. Readers should consult with a qualified professional or tax advisor before making any decisions based on the content of this article. Author will not accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.