Can we issue credit note for the income issued in PY

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This discussion addresses whether a credit note can be issued for income booked in a previous financial year (FY 2018-19) when payment hasn't been received. While a commercial credit note can be issued, tax adjustments are generally not possible for that specific year. For later financial years, there are specific deadlines for issuing GST credit notes and adjusting tax liabilities, with recent changes impacting the process and requiring buyer ITC reversal in certain cases.

Jasmeen Marwah

Jasmeen Marwah (Querist)

04 July 2020 We have booked some income in the year 2018-19.but not received the payment yet can we issue credit note now .we have not yet filed gstr 1 March 2020. Can we issue credit note in this return

Hemal Makwana

Hemal Makwana (Expert)

05 July 2020 you can issue credit for the invoices issued in previous FY. hence, for FY 2019-20, you can issue credit note till September 2020 and adjust tax liability. but for FY 2018-19, you can still issue credit note but no tax adjustment, so u would have to issue commercial credit note. no need to discuss in returns.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

29 October 2026 Since Finance Act 2022 the GST credit note deadline is 30 November after the FY end (or annual return date, if earlier), not September; from 1-10-2025 the reduction also needs the buyer to reverse ITC — and mere non-payment by the customer is not a ground for a GST credit note.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

29 October 2026 Two points: a GST credit note must be issued by 30 November after the end of the FY of the invoice (Sec 34(2)), and it can't be issued merely because payment wasn't received, since Sec 34(1) allows it only for excess value or tax, deficient services or goods returned; unpaid amounts are a bad debt with no GST reduction.

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