CGST amendment on credit note: Compliance burden on suppliers may be higher

Tax experts have raised concern over the proposed amendment in the Central Goods and Services Tax Act, 2017 in the 2025-26 (FY26) Budget in respect of credit note that puts the onus on suppliers to ensure reversal of input tax credit (ITC) availed by the recipient in order to reduce their (suppliers’) own tax liability.

 

Credit note is given by the seller to the buyer in cases of sales returns, discounts, and overbilling to reduce the amount payable by the buyer or adjust it against future payments.

 

According to the experts, till the time invoice management system (IMS) — an