What is the difference between a debit note and a credit note?

A debit note increases the amount payable on an original invoice (e.g. undercharge); a credit note decreases it (e.g. return or discount).

Debit Note vs Credit Note Under GST

Last updated: 2 July 2026 · 5 min read

Debit and credit notes adjust the value of an invoice already issued. The direction is the key difference: one raises the amount, the other lowers it.

	Debit note	Credit note
Effect	Increases invoice value	Decreases invoice value
Typical reason	Undercharge, extra goods, tax charged too low	Sales return, post-sale discount, overcharge
Issued by	Supplier	Supplier

Time limit for credit notes

A credit note that reduces GST should be declared by 30 November following the end of the financial year of the original supply, or the date of the annual return, whichever is earlier. Debit notes do not carry the same reduction time limit because they increase liability.

How to create them

Use the debit note generator or the credit note generator. Always reference the original invoice number and date, and state the reason.

FAQ

What is the difference?

A debit note increases the amount payable; a credit note decreases it.

For informational purposes only. Verify with the official GST portal or a qualified tax professional.