Supporting Documents Required for GST Notice on Credit Notes - FY 2021-22

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Rajagopal K

Taxation Head

1435 Points Posted on 26 August 2025

Dear Experts,

One of our clients has received a notice from the GST Department regarding output tax liability reduction through credit notes for FY 2021–22. The department has questioned the eligibility of these credit notes under Section 34 and Section 15(3)(b) of the CGST/TNGST Act, 2017.

Key Points from the Notice:

1. Credit notes were issued during FY 2021–22.

2. The department assumes that some of these credit notes pertain to supplies made in FY 2020–21.

3. It has asked the client to justify the reduction in output tax liability and confirm that:

(1) The credit notes comply with Section 34.

(2) The conditions under Section 15(3)(b) (especially regarding post-supply discounts) are fulfilled.

(3) The recipient has reversed input tax credit (ITC) where applicable.

4. The department appears to be relying on Circular No. 212/6/2024-GST, dated 26-06-2024, issued by CBIC.

Clarification from Our End:

All credit notes were issued for supplies made within FY 2021–22 only.
All credit notes were properly disclosed in GSTR-1 under the Credit Notes section in the respective months of issuance.
As per our understanding, Circular No. 212/6/2024-GST clearly states that it is applicable only for FY 2023–24 onwards, and not retrospectively applicable to FY 2021–22.

Query:

What are the key supporting documents that should be prepared and submitted to respond effectively to this notice, especially given that the cited circular does not apply to FY 2021–22?

Any clarification on handling such departmental misapplication of circulars would also be appreciated.

Thank you in advance.

Rajagopal K

Replies (2)

Quick Summary

A GST notice has been issued to a client questioning the validity of credit notes issued in FY 2021-22, specifically regarding Sections 34 and 15(3)(b) of the CGST Act. The department incorrectly appears to be applying a recent circular (Circular No. 212/6/2024-GST) which is only applicable from FY 2023-24 onwards. This discussion seeks guidance on the crucial supporting documents required to demonstrate compliance and refute the department's assumptions, ensuring the credit notes are recognised as valid for the correct financial year.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 26 August 2025

The key suppoting documents that should be prepared and submitted include:

Proof of credit notes issuance for supplies made within FY 2021-22 only: Documentation showing all credit notes pertain to this period.
GSTR-1 filigs for the respective months of issuance: Showing credit notes were properly disclosed under the Credit Notes section.
Justification for reduction in output tax liability: Confirming compliance with: Section 34 , conditions under Section 15(3)(b) regarding post-supply discounts, Reversal of input tax credit (ITC) where applicable.
Reference to Circular No.212/6/2024-GST; Highlighting its applicability to FY 2023-24 onwards and not retrospectively to FY 2021-22.
These documents should support the clarifications provided and help in effectively resonding to the department's notice.

Tax Garden

Tax Consultant

2036 Points Posted on 11 May 2026

For a GST notice on credit notes, the core documents to prepare are the original invoices against which each credit note was issued, the credit note copies with correct GSTIN and tax details, proof that the credit notes were reported in your GSTR-1 for the relevant period, and a reconciliation showing how output tax was adjusted. If the notice is questioning whether the credit notes are genuine (for example, whether the corresponding sales reversal actually happened), adding the debit notes from the buyer side helps significantly.

Given this is for FY 2021-22, it is worth having a CA review the notice category before you submit, since the documentation standard varies between scrutiny notices and show cause notices.