GST credit note adjustment without pmt of Tax

Hi Kamal,

Here’s how you can handle the situation with the credit note and new invoice on the GST portal:

Issue Summary:

• June 2021: Sale invoice raised and payment received in advance.

• June 2021: Credit note issued against that invoice due to project postponement.

• Now (Sep 2022): You want to raise a new invoice against that credit note.

• GSTR-1 for Sep 2022 is pending.

How to rectify:

1. You cannot delete a credit note once filed on GST portal for the earlier period.

2. You cannot “apply” a credit note against a new invoice directly on the portal as credit notes are linked to original invoices only.

3. Recommended approach:

   • Amend the credit note (if possible):
     If the credit note was uploaded with wrong details (like date or amount), you may try to amend it in the same financial year or as per allowed amendment window.

   • If amendment not possible (usually limited to the same FY):
     You need to raise a debit note against the credit note to reverse the effect of the credit note. This debit note will bring the taxable amount back to the books.

4. For the new invoice:

   • Raise a fresh invoice for the new supply in Sep 2022 as planned.

5. Accounting and GST impact:

   • Credit note in June 2021 reduced your taxable output.

   • Debit note in Sep 2022 will increase taxable output.

   • New invoice in Sep 2022 will also add taxable output.

   • Make sure your GSTR-1 for Sep 2022 includes the debit note and new invoice.

Summary of steps:

Note:

• You cannot “apply” the credit note against a new invoice on the portal. The credit note is linked only to original invoice.

• Always maintain proper documentation and follow GST amendment timelines (usually within the same FY).

• Consult your GST consultant or CA if amendment window is closed or if complex adjustments are involved.