Guides · GST
Credit notes and debit notes under GST
A credit note and a debit note are the two documents that adjust a tax invoice after it has been issued. A credit note lowers the invoice value; a debit note raises it.
When to issue a credit note
A supplier issues a credit note when the taxable value or tax on an already-issued invoice needs to come down — for a return, a rejection, a post-supply discount, or an overcharge. The credit note reduces the supplier's output tax liability, subject to the recipient reversing the corresponding credit.
Credit notes must be linked to the original invoice and declared in the return for the relevant period, within the time limit the law allows.
When to issue a debit note
A supplier issues a debit note when the taxable value or tax on an invoice needs to go up — for an undercharge or an additional supply against the same invoice. The debit note increases the supplier's output tax liability.
Like credit notes, debit notes reference the original invoice so both sides can reconcile the change.
How Lekha records notes
Lekha records credit and debit notes against the bills they adjust, so the two-sided ledger stays accurate when a value changes after issue.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What is the difference between a credit note and a debit note?
- A credit note reduces the value or tax of an issued invoice; a debit note increases it. Both are linked to the original invoice.
- Who issues a credit note under GST?
- The supplier issues the credit note, typically for returns, rejections, post-supply discounts, or an overcharge on the original invoice.
- Do credit and debit notes affect GST returns?
- Yes. They adjust the taxable value and tax and must be declared in the GST return for the relevant period, within the time limit allowed.
This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.