How this template was made: the mandatory reference to the original invoice, the serial-number requirement and the seven reason codes are taken from Section 34 and the rules explained field by field on credit and debit notes under Section 34 — laid out and the formulas written by us.
A worked example
A Ludhiana electronics distributor sells 60 units of a speaker model to a retailer in Shimla (inter-state, IGST invoice) at ₹2,400 a unit. Twelve arrive with a manufacturing fault and are returned.
| Qty | Rate | Taxable value | IGST 18% | Total | |
|---|---|---|---|---|---|
| Returned units | 12 | ₹2,400 | ₹28,800 | ₹5,184 | ₹33,984 |
The credit note references the original invoice's number and date, carries its own serial number from the credit-note series, and adjusts IGST because the original invoice did — a note never switches tax heads on its own. Reason code: 01, Sales return. This reduces the distributor's liability only if declared by the 30 November deadline explained on the full guide.
The seven reason codes
| Code | Reason |
|---|---|
| 01 | Sales return |
| 02 | Post-sale discount |
| 03 | Deficiency in service |
| 04 | Correction in invoice |
| 05 | Change in place of supply |
| 06 | Finalisation of provisional assessment |
| 07 | Others |
Questions
Can I just edit or delete the original invoice instead of raising a note?
No — once issued, an invoice is a legal document your customer may have already claimed credit against. A credit note is the correction mechanism precisely because the original stays intact; see why an invoice is never edited or deleted for the full reasoning.
What if the 30 November deadline has already passed?
You can still issue a commercial credit note to settle things with your customer, but it will no longer reduce the GST you already paid on the original invoice.
Does it go in CDNR or CDNUR on my GSTR-1?
CDNR if your customer is registered, CDNUR if not — same distinction as on the invoice itself. The full filing mechanics are on filing GSTR-1 from your invoices.
Must the tax heads on the note match the original invoice?
Yes. A note against an IGST invoice adjusts IGST; a note against a CGST/SGST invoice adjusts those two. It follows the original — it cannot switch heads on its own.
Can one credit note cover several invoices?
Keep it one note per invoice unless you specifically know your filing process handles a consolidated note — referencing a single invoice number and date is what the simple case, and this template, is built for.
How BahiSathi handles it
Raise the note from the invoice it adjusts, not from a blank document — the customer, the lines and the tax heads come across already matched, so a note against an inter-state invoice can't accidentally land on the wrong heads. The reference to the original number and date is stored, which is what lets the GSTR-1 export place it in CDNR or CDNUR automatically.
A plain-language format, not legal advice. The deadline in particular has been amended before — confirm the current position with your accountant.