CREDIT NOTES WITHOUT GST
This query is : Resolved
09 September 2026
SIR,
WE ARE ISSUING CREDIT NOTES TO OUR CLIENTS AFTER SALES WITHOUT GST. NOW DURING THE TIME OF CLIENTS AUDIT THE AUDIT PARTY RAISING OBJECTION IT CANNOT BE ISSUED. PLEASE ADVISE WHETHER WE CAN ISSUE CREDIT NOTES WITHOUT GST FOR DISCOUNTS.
THANKS IN ADVANCE
WE ARE ISSUING CREDIT NOTES TO OUR CLIENTS AFTER SALES WITHOUT GST. NOW DURING THE TIME OF CLIENTS AUDIT THE AUDIT PARTY RAISING OBJECTION IT CANNOT BE ISSUED. PLEASE ADVISE WHETHER WE CAN ISSUE CREDIT NOTES WITHOUT GST FOR DISCOUNTS.
THANKS IN ADVANCE
10 September 2026
Can you issue a credit note without GST? Yes, but only as a commercial/financial credit note where you do not reduce your output tax liability or adjust GST.
Can you reduce tax liability without GST? No. If the credit note is meant to reduce taxable value and GST liability, it must include GST as per Section 34 of the CGST Act.
Action item for the client: Clarify the nature of the credit notes. If they are adjusting tax liability, they must switch to statutory GST credit notes. If they are pure financial/commercial discounts where tax liability remains untouched, maintain clear commercial documentation to satisfy the audit party that no GST reduction was claimed.
Can you reduce tax liability without GST? No. If the credit note is meant to reduce taxable value and GST liability, it must include GST as per Section 34 of the CGST Act.
Action item for the client: Clarify the nature of the credit notes. If they are adjusting tax liability, they must switch to statutory GST credit notes. If they are pure financial/commercial discounts where tax liability remains untouched, maintain clear commercial documentation to satisfy the audit party that no GST reduction was claimed.
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