Does a credit note reduce my output GST liability?

Yes, compliant credit notes reduce your taxable sales and corresponding output GST liability in Table 9B of GSTR-1.

Adjustments 4 min read• Updated October 2026

How to Issue Credit Notes for Sales Returns and Adjustments

Issue legally compliant GST credit notes to adjust invoice values for damaged goods, sales returns, billing discrepancies, or post-sale discounts.

Guide Overview & Quick Facts

Screen Guide

Estimated Time 4 min read

Steps to Complete 5 Action Steps

Target Workspace ScreenCredit Notes

Path: /business/credit-notesOpen This Screen in InvGear

Step-by-Step Instructions Box

Execute these 5 sequential steps to complete the workflow without compliance errors.

5 Steps Total

Step 1 of 5

Click 'Credit Notes' under Sales in the sidebar (/business/credit-notes).

Step 2 of 5

Select the customer and link the Original Invoice Number that is being adjusted.

Step 3 of 5

Select a standardized reason (e.g., 01-Sales Return, 02-Post Sale Discount, 03-Deficiency in Services, 04-Correction in Invoice).

Step 4 of 5

Enter the quantity returned or discount amount. The tax will be calculated proportionally at the original invoice rate.

Step 5 of 5

Save the credit note. It will automatically reduce the customer's outstanding balance and reflect in your Table 9B of GSTR-1.

✓Under Section 34 of the CGST Act, credit notes for a financial year must be declared in GST returns no later than 30th November following the end of the financial year.

Quick answers to common questions about using this screen.

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