Tax Invoice; Credit and Debit Notes
AI-assisted · review in progress · last updated 25 July 2026 · jump to quick revision
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- Mnemonic '31-32-33-34: I-Prohibit-Indicate-Correct' — Sec 31 tax invoice (+31A digital payment), Sec 32 prohibits unauthorised tax collection, Sec 33 tax shown in price, Sec 34 credit/debit notes. Chapter VII CGST Act + Rules 46–55A; applies to IGST via Sec 20 IGST Act.
- Golden rule: taxable supply → tax invoice; exempt/composition → bill of supply; advance → receipt voucher (refund voucher if no supply follows); RCM from URD → self-invoice + payment voucher; goods moved without supply → delivery challan.
- Time limits: goods at removal/delivery; services within 30 days (45 days for banks/insurers/FI/NBFC); continuous supplies per statement/due date/event; sale-or-return — earlier of supply or 6 months.
- E-invoicing is mandatory when aggregate turnover exceeds ₹5 crore (B2B + exports) via IRP → IRN → QR; dynamic QR code on B2C invoices when turnover exceeds ₹500 crore.
- Credit note 'may' be issued and is time-capped by the 30 November rule; debit note 'shall' be issued with no outer limit — and no ITC flows without a tax invoice or debit note.
Based on GST law as on 30.04.2025 (May 2026 exams onwards). Section numbers are CGST Act unless stated.
How the chapter fits together
Chapter VII of the CGST Act (Sections 31–34) plus Chapter VI of the CGST Rules (Rules 46–55A) govern every document in the GST paper trail; Section 20 of the IGST Act applies it all to IGST too. Memory hook — “31-32-33-34: I-Prohibit-Indicate-Correct”:
- Sec 31 — tax Invoice (with 31A: Government may mandate digital payment modes to the recipient) →
- Sec 32 — Prohibits unauthorised tax collection: an unregistered person cannot collect tax at all; a registered person only as per the Act/Rules →
- Sec 33 — tax must be prominently Indicated in the price of the supply →
- Sec 34 — Correct the invoice later via credit/debit notes.
The full document trail (mnemonic “TIC-BREP-DCS”): Tax Invoice, Invoice-cum-BOS, Consolidated (Tax/Revised) invoice, Bill of Supply, Receipt Voucher, E-invoice/self-invoice (RCM), Payment Voucher, Delivery Challan, Credit Note, Supplementary/Debit Note. The golden rule maps situation to document:
| Situation | Document |
|---|---|
| Taxable supply | Tax invoice |
| Exempt supply / composition supplier | Bill of supply |
| Mixed taxable + exempt supply to URD | Invoice-cum-bill of supply [Rule 46A] |
| Advance received | Receipt voucher |
| Advance refunded, no supply made | Refund voucher |
| RCM inward supply from URD | Self-invoice + payment voucher |
| Goods moved without a supply | Delivery challan |
| Value/tax overstated, goods returned, deficient supply | Credit note |
| Value/tax understated | Debit note |
Why it matters beyond procedure: no ITC can be taken without a tax invoice or debit note — this chapter feeds directly into the ITC chapter.
The document trail — Sections 31 to 33
Continuous supply — goods vs services [Sec 2(32), 2(33)]
Both are recurring supplies under a contract with periodic invoicing/payment. Goods: no minimum duration prescribed. Services: the contract period must exceed 3 months — the 3-month test is for services ONLY (AMC is the classic example).
Exempt supply [Sec 2(47)]
Nil-rated or wholly exempt supply under Sec 11 CGST (or Sec 6 IGST) plus non-taxable supply. An exempt supply triggers a bill of supply — a document that shows no tax rate or amount — instead of a tax invoice.
Special documents and their traps:
| Document | When issued | Trap / keyword |
|---|---|---|
| Revised tax invoice | Against supplies between the effective date of registration and the certificate date | Within 1 month of the registration certificate |
| Consolidated tax invoice | Day-end single invoice for supplies of value under ₹200 to URD not demanding an invoice | 3 cumulative conditions; also available for bills of supply |
| CRTI (Consolidated Revised Tax Invoice) | For URD recipients of the intervening (registration-gap) period | ₹2.5 lakh inter-State threshold — state-wise/recipient-wise split |
| Receipt voucher | On receipt of an advance [Sec 31(3)(d)] | Rate unascertainable → 18%; nature unascertainable → inter-State (Rule 50) |
| Refund voucher | Against a receipt voucher when no supply follows [Sec 31(3)(e)] | Only if no tax invoice was issued |
| Self-invoice (RCM) | Recipient invoices a supply received from a URD supplier [Sec 31(3)(f)] | Within 30 days [Rule 47A]; includes Sec 51 TDS-only registrants |
| Payment voucher | Issued by the RCM-liable recipient at the time of payment to the URD supplier [Sec 31(3)(g)] | Sec 9(3)/9(4) supplies |
| Delivery challan | Accompanies goods where an invoice is not needed at removal | Liquid gas (quantity unknown), job work, non-supply transport, SKD/CKD, sale-on-approval, art works for exhibition (Rule 55) |
| Invoice-cum-BOS | Single document for taxable + exempt supply to URD [Rule 46A] | Notwithstanding Rules 46, 49, 54 |
The rules that carry the particulars:
| Rule | What it says |
|---|---|
| 46 | Tax invoice particulars — serial number max 16 characters, GSTIN, HSN, QR code etc. |
| 46A | Invoice-cum-bill of supply for mixed supplies to URD |
| 47 | Service invoice period — 30 days (45 for insurer/bank/FI/NBFC) |
| 47A | RCM self-invoice — 30 days from receipt |
| 48 | Manner of issue: goods triplicate, services duplicate; e-invoice in Form GST INV-01 |
| 49 | Bill of supply — no tax rate/amount shown; 4th proviso (QR) not yet effective |
| 50 / 51 / 52 | Receipt voucher (18%/inter-State defaults) / refund voucher (cross-refs receipt voucher no. and date) / payment voucher particulars |
| 53 | Revised invoice particulars; Rule 53(1A) = credit/debit note particulars |
| 54 | Special suppliers — bank/insurer/GTA/passenger transport/multiplex issue alternate documents; serial no./address optional |
| 55 | Delivery challan — cases and particulars; triplicate |
| 55A | Tax invoice / bill of supply / challan must accompany goods in transport |
Time limits — when each document is due
| When | Document / event | Where |
|---|---|---|
| At/before removal | Tax invoice — goods, movement involved (“removal”) | 31(1)(a) |
| At/before delivery | Tax invoice — goods, no movement (“delivery”) | 31(1)(b) |
| 30 days from supply | Tax invoice — services (general) | 31(2), Rule 47 |
| 45 days from supply | Insurer/bank/FI incl. NBFC (also for distinct persons in these categories) | 31(2), Rule 47 |
| Before/at each statement or payment | Continuous supply of goods — no 3-month test | 31(4) |
| On/before due date · receipt of payment · event completion | Continuous services — the 3 limbs: due date ascertainable / not ascertainable / event-linked | 31(5)(a)–(c) |
| At cessation | Service ceases before completion — invoice to the extent supplied | 31(6) |
| Earlier of supply or 6 months from removal | Sale-or-return goods | 31(7) |
| 1 month from registration certificate | Revised tax invoice for intervening-period supplies | 31(3)(a) |
| Day-end (daily) | Consolidated tax invoice (under-₹200 supplies) | 31(3)(b) |
| 30 days from receipt | RCM self-invoice | Rule 47A |
| At time of payment | Payment voucher (RCM) | 31(3)(g) |
| Earlier of 30 Nov following the FY of supply or annual return date | Credit note — outer limit for declaring in return | 34(2) |
| Month of issue, no outer limit | Debit note — declaration in return | 34(4) |
Exceptions — when a tax invoice is not required
Every carve-out from the normal tax-invoice requirement:
- Value under ₹200 + recipient unregistered + recipient does not demand an invoice → skip the invoice; issue a consolidated tax invoice at day-end. Not available for multiplex cinema admission. The relaxation applies to bills of supply too.
- Exempt supply / composition taxpayer (Sec 10) → bill of supply instead of a tax invoice (not even a BOS if value is under ₹200, subject to the same conditions).
- Mixed taxable + exempt to URD → single invoice-cum-bill of supply [Rule 46A].
- Advance received but no supply materialises → refund voucher, not a tax invoice.
- Banks/insurers/FI/NBFC → consolidated statement/advice (by any name) instead of an invoice; serial number and address optional.
- GTA (road transport) → consignment note with specified particulars deemed the tax invoice.
- Passenger transport → ticket in any form deemed the tax invoice; serial number/address optional.
- Multiplex cinema admission → electronic ticket deemed the tax invoice.
- Goods removed without supply (liquid gas with quantity unknown, job work, non-supply transport, SKD/CKD, sale-on-approval, art works for exhibition) → delivery challan now, invoice later.
- Reverse charge from a URD supplier → the recipient issues the self-invoice (not the supplier) plus a payment voucher.
Two further relaxations: signature is not required on e-invoices, electronic bills of supply and electronic tickets (per the IT Act, 2000); HSN is not required where aggregate turnover is up to ₹5 crore, on invoices issued to unregistered persons.
E-invoicing and QR codes
E-invoice and IRN
An e-invoice is the taxpayer’s own ERP invoice (or credit/debit note) reported to the Invoice Registration Portal — not a government-generated invoice. The IRP (10 portals: einvoice1-10.gst.gov.in) returns a 64-character IRN (unique hash); the invoice is valid only with a valid IRN.
- Who: a notified person — aggregate turnover (PAN-based) above ₹5 crore in any FY from 2017-18 onwards.
- What: B2B supplies + exports only — not B2C, not ISD.
- How: report the invoice in Form GST INV-01 (JSON schema) to the IRP → receive the IRN → print the static QR code embedding the IRN on the invoice.
- Exempt even above ₹5 crore: SEZ units (not developers), insurer/bank/FI/NBFC, GTA (road), passenger transport suppliers, multiplex admission, Government departments and local authorities, ISD — each must give the prescribed declaration on the invoice.
- Dynamic QR code (scan-and-pay payment cross-reference): mandatory only on B2C invoices of suppliers with aggregate turnover above ₹500 crore; not for exports (treated as B2B); UIN holders count as B2C, not “registered persons”.
- After the fact: IRN cancellation is barred once the linked e-way bill is verified/active in transit; e-invoice amendment happens only via GSTR-1 on the GST portal, never on the IRP.
Credit and debit notes — Section 34
Credit note [Sec 2(37)]
Document issued by a registered person under Sec 34(1) where value/tax was overstated, goods are returned, or the supply is deficient. The statutory credit note is not the same as a financial/commercial credit note.
Debit note [Sec 2(38)]
Document issued by a registered person under Sec 34(3) where value/tax was charged less than actual. Statutorily includes a “supplementary invoice” [Explanation to Sec 34(4)].
| Point | Credit note [34(1)–(2)] | Debit note [34(3)–(4)] |
|---|---|---|
| Trigger | Value/tax excess, goods returned, deficient supply | Value/tax charged less than actual |
| Obligation | “May” issue — discretionary | “Shall” issue — mandatory |
| Declare in return | Month of issue, capped by the earlier of 30 Nov following the FY of supply or the annual return date | Month of issue — no outer time limit |
| Extra point | No reduction of output liability if the tax/interest incidence was “passed on” to another | Includes supplementary invoice |
Secondary discounts trap: a post-supply discount not known at the time of supply fails Sec 15(3)(b) — so no GST credit note is possible; only a financial/commercial credit note, which has no GST effect, no time limit, and is not reported in the return for tax adjustment.
Amendment watch: the Finance Act 2025 amendment to the Sec 34(2) proviso (making the recipient’s ITC reversal a precondition for the supplier’s credit-note benefit) is not yet notified/effective as on 30.04.2025.
No chapter-specific penalties exist for invoicing lapses — the general penalty provisions (Sec 122, Chapter 19) apply to non-issue or incorrect invoices.
- Issuing a GST credit note for a secondary discount — Sec 15(3)(b) is not satisfied, so only a financial/commercial credit note (no GST effect) is possible.
- Swapping the verbs: credit note = “may” issue and is time-capped; debit note = “shall” issue with no time cap — and the debit note includes the “supplementary invoice”.
- Applying the 3-month contract test to continuous supply of goods — it applies to services only; goods have no minimum duration.
- Treating SEZ units and developers alike for e-invoicing — the unit is exempt, the developer is not (must e-invoice if turnover exceeds ₹5 crore).
- Confusing QR codes: static QR embeds the IRN on B2B e-invoices; dynamic QR is a scan-and-pay reference, mandatory only for B2C at turnover above ₹500 crore.
- Treating the RCM self-invoice and payment voucher as alternatives — both are mandatory: self-invoice within 30 days (Rule 47A), payment voucher at the time of payment.
- Mixing up the consolidated tax invoice (daily, under-₹200 URD supplies) with the CRTI (registration-gap supplies to URD, within 1 month of the certificate, ₹2.5 lakh inter-State threshold).
- Issuing a refund voucher freely — it exists only where an advance was received, no supply materialised, and no tax invoice was issued.
Quick revision cards
Chapter map mnemonic?
Invoice time limit — goods vs services?
Sale-or-return deadline?
Continuous supply tests?
Who must e-invoice, and how?
Dynamic QR code applies when?
Credit note outer limit?
Debit note time limit?
RCM from URD — which documents?
Receipt voucher defaults?
Consolidated tax invoice conditions?
Delivery challan cases?