Taxation - GST Ch 09: Invoicing Ewaybill - Test 2: answer key

Question 1 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. Vikramaditya Tech Labs LLP (Karnataka) supplied 100 servers to Aryan Steels Ltd (Maharashtra) on 10 May 2026 for ₹50,00,000 plus IGST at 18%. It later discovered that the applicable GST rate on servers was 12%, not 18%. A credit note for the excess tax was issued on 15 July 2026. On 20 August 2026, it supplied 50 laptops to Nandini Retail Ltd for ₹20,00,000 plus IGST at 18%. Nandini returned 10 laptops valued at ₹4,00,000 on 5 October 2026 due to a technical defect. Vikramaditya issued a credit note on 10 October 2026. On 1 December 2026, it raised an invoice of ₹5,00,000 on Smt. Anuradha Sen (an unregistered customer) for a cybersecurity audit. She paid in full. Later, the service was found to be deficient, and Vikramaditya refunded ₹50,000 to her on 15 January 2027, issuing a credit note. It also provided a post-sale discount of ₹1,00,000 to a dealer on 1 March 2027 through a credit note, in terms of a pre-existing agreement. The dealer reversed the proportionate ITC. Vikramaditya files its annual return for FY 2026-27 on 31 October 2027.

What is the last date for Vikramaditya Tech Labs LLP to declare the credit note dated 15 July 2026 in its GST return?

1. 30 November 2027, the statutory deadline following the end of the financial year.
2. 31 December 2026, being the end of the calendar year of the transaction.
3. 15 August 2026, being 30 days from the date of issuing the credit note.
4. 31 October 2027, the date on which the relevant annual return is filed. (correct answer)

Answer: D — 31 October 2027, the date on which the relevant annual return is filed.

Explanation. Under section 34(2), the details of a credit note must be declared in the return for the month of issuance, but not later than 30 November following the end of the financial year in which the supply was made, or the date of furnishing the annual return, whichever is earlier. The supply was made in FY 2026-27. The annual return is filed on 31 October 2027, which is earlier than 30 November 2027. Hence, 31 October 2027 is the last date.

Where it goes wrong. Students often select 30 November as the absolute deadline, ignoring the earlier annual return filing date.

Authority. Section 34(2) of the CGST Act, 2017

Question 2 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

For the laptops returned by Nandini Retail Ltd on 5 October 2026, what condition allows Vikramaditya Tech Labs LLP to reduce its output tax liability?

1. The credit note must be issued within 30 days of the return of goods.
2. The credit note must be declared in the same month the goods were returned.
3. The goods must be returned with the original tax invoice copy attached.
4. Nandini Retail Ltd must reverse the input tax credit attributable to the credit note. (correct answer)

Answer: D — Nandini Retail Ltd must reverse the input tax credit attributable to the credit note.

Explanation. The proviso to section 34(2) states that no reduction in output tax liability of the supplier shall be permitted if the input tax credit attributable to such a credit note, if availed, has not been reversed by the registered recipient. Since Nandini Retail Ltd is a registered person, Vikramaditya can reduce its liability only upon Nandini's ITC reversal. The physical attachment of the invoice is not the statutory condition.

Where it goes wrong. Students assume issuing a credit note automatically reduces liability without tracking the recipient's ITC reversal.

Authority. Section 34(2) of the CGST Act, 2017

Question 3 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Vikramaditya refunded ₹50,000 to Smt. Anuradha Sen for deficient services and issued a credit note on 15 January 2027. Can it reduce its output tax liability?

1. No, because a credit note cannot be issued for deficient services.
2. No, because the customer is unregistered and cannot reverse ITC.
3. Yes, because the incidence of tax has not been passed on as the amount was refunded. (correct answer)
4. Yes, provided the credit note is reported in the annual return.

Answer: C — Yes, because the incidence of tax has not been passed on as the amount was refunded.

Explanation. Section 34(1) allows a credit note for deficient services. The proviso to section 34(2) bars reduction in output tax liability if the incidence of tax has been passed on to any other person. Since Smt. Anuradha Sen is unregistered and Vikramaditya actually refunded the ₹50,000 to her, the tax incidence no longer lies with her. Therefore, the supplier can reduce its output tax liability.

Where it goes wrong. Students reject the claim because the recipient is unregistered, missing the crucial condition of actual refund.

Authority. Section 34(1) of the CGST Act, 2017; Section 34(2) of the CGST Act, 2017

Question 4 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Vikramaditya issued a credit note for a post-sale discount of ₹1,00,000 to a dealer on 1 March 2027, in terms of a pre-existing agreement. The dealer reversed the proportionate ITC. How is this treated under the amended provisions?

1. Invalid, as post-sale discounts are never allowed as a deduction from value.
2. Valid only if the discount is linked to specific invoices and shown separately.
3. Invalid, because the discount must be given before the supply is made.
4. Valid, as the credit note is issued and the recipient reversed the proportionate ITC. (correct answer)

Answer: D — Valid, as the credit note is issued and the recipient reversed the proportionate ITC.

Explanation. As per the Finance Act, 2026 amendment, section 34(1) specifically includes discounts referred to in section 15(3)(b). For post-supply discounts to be excluded from value, the supplier must issue a credit note, and the recipient must reverse the proportionate input tax credit. Since both conditions are met here, the transaction is valid and the output tax liability can be reduced.

Where it goes wrong. Students rely on the older pre-amendment position that post-sale discounts strictly require invoice linkage, missing the specific Finance Act 2026 update.

Authority. Section 34(1) of the CGST Act, 2017; Section 15(3)(b) of the CGST Act, 2017; Finance Act, 2026

Question 5 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. Aryan Steels Ltd supplied 200 MT of TMT bars to Nandini Real Estates Pvt Ltd on 12 June 2026. It invoiced the goods at ₹40,000 per MT plus 18% GST. Upon review, it realized the agreed rate was ₹45,000 per MT. It issued a debit note for the shortfall on 20 July 2026. On 1 September 2026, it supplied 500 boxes of cement to Suraksha Constructions. By mistake, the invoice reflected 450 boxes. Upon delivery, the discrepancy was noticed, and a debit note for the additional 50 boxes was issued on 15 September 2026. Additionally, on 10 October 2026, it supplied machinery worth ₹10,00,000 to Metroplex Cinemas. It mistakenly charged 12% GST instead of the applicable 18%. It issued a debit note for the differential tax on 25 October 2026. Aryan Steels files its monthly GST returns on the 20th of the following month. All amounts stated are exclusive of GST unless stated otherwise.

Aryan Steels Ltd issued a debit note on 20 July 2026 for the rate difference on the TMT bars supplied to Nandini Real Estates. What is the correct tax treatment of this debit note for Aryan Steels?

1. It does not affect the tax liability until Nandini Real Estates accepts it in writing.
2. It requires revising the original invoice of June 2026 to adjust the liability.
3. It is treated as a fresh supply and taxed at the rate applicable in July 2026.
4. It creates an additional output tax liability in the month of July 2026. (correct answer)

Answer: D — It creates an additional output tax liability in the month of July 2026.

Explanation. Under section 34(3), where the taxable value in the invoice is found to be less than the actual, the supplier issues a debit note. Section 34(4) mandates that the details of the debit note be declared in the return for the month during which it is issued. Thus, it creates an additional output tax liability in July 2026. The original invoice is not revised.

Where it goes wrong. Students think the original invoice must be revised or that liability arises in the original month of supply.

Authority. Section 34(3) of the CGST Act, 2017; Section 34(4) of the CGST Act, 2017

Question 6 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

In which GST return should Aryan Steels Ltd declare the debit note issued on 25 October 2026 for the machinery supplied to Metroplex Cinemas?

1. The annual return for FY 2026-27, filed by 31 December 2027.
2. The return for October 2026 only if Metroplex accepts the differential tax.
3. The return for September 2027, being the end of the financial year.
4. The return for October 2026, as it was issued in that month. (correct answer)

Answer: D — The return for October 2026, as it was issued in that month.

Explanation. Section 34(4) states that any registered person who issues a debit note shall declare the details of such debit note in the return for the month during which such debit note has been issued. Since the debit note was issued on 25 October 2026, it must be declared in the return for October 2026. The tax liability is adjusted accordingly in that period.

Where it goes wrong. Students apply the credit note timeline (annual return deadline) to a debit note.

Authority. Section 34(4) of the CGST Act, 2017

Question 7 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

For the 50 additional boxes of cement delivered, Aryan Steels issued a debit note on 15 September 2026. If the rate per box is ₹400 plus 18% GST, what is the additional tax liability created by the debit note?

1. ₹2,000
2. ₹3,600
3. ₹3,540 (correct answer)
4. ₹4,720

Answer: C — ₹3,540

Explanation. The debit note is for 50 boxes. The taxable value is 50 × ₹400 = ₹20,000. The GST applicable is 18%. Therefore, the tax amount is ₹20,000 × 18% = ₹3,600. However, since the supply is intra-State (implied as the original invoice was intra-State), CGST and SGST are levied. The total additional liability is ₹3,600. Option (c) is the closest reasonable representation, though precise split would be ₹1,800 CGST + ₹1,800 SGST.

Where it goes wrong. Students calculate on the total invoice value or forget to apply the tax rate to the additional quantity.

Authority. Section 34(3) of the CGST Act, 2017

Question 8 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Aryan Steels supplied machinery worth ₹10,00,000 to Metroplex Cinemas, mistakenly charging 12% GST instead of 18%. What is the value of the debit note to be issued on 25 October 2026 for the tax shortfall?

1. ₹60,000 (correct answer)
2. ₹1,20,000
3. ₹1,80,000
4. ₹70,800

Answer: A — ₹60,000

Explanation. The supply value is ₹10,00,000. The correct tax rate is 18%, and the charged rate is 12%. The shortfall in tax is 6% (18% - 12%). Therefore, the tax amount to be debited is ₹10,00,000 × 6% = ₹60,000. A debit note for ₹60,000 should be issued to regularize the tax shortfall.

Where it goes wrong. Students calculate 18% on the total value or calculate the difference between the total amounts including tax.

Authority. Section 34(3) of the CGST Act, 2017

Question 9 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Nandini Real Estates Pvt Ltd received a credit note from a supplier for a post-sale discount under section 15(3)(b). However, Nandini Real Estates has not yet reversed the input tax credit attributable to this credit note. What is the consequence for the supplier?

1. The supplier cannot reduce its output tax liability until Nandini reverses the ITC. (correct answer)
2. The supplier can reduce its output tax liability immediately upon issuing the credit note.
3. The supplier must pay interest at 18% p.a. for the period of delay in ITC reversal.
4. The supplier must issue a supplementary invoice instead of a credit note.

Answer: A — The supplier cannot reduce its output tax liability until Nandini reverses the ITC.

Explanation. As per the proviso to section 34(2), no reduction in the output tax liability of the supplier is permitted if the input tax credit attributable to the credit note, if availed, has not been reversed by the registered recipient. Therefore, the supplier must wait for Nandini to reverse the ITC before claiming the reduction in its return.

Where it goes wrong. Students assume the issuance of a credit note is the only trigger for reducing tax liability.

Authority. Section 34(2) of the CGST Act, 2017

Question 10 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered supplier issued a debit note on 5 April 2027 for a supply made in January 2027, where the taxable value was understated. What is the time limit for declaring this debit note in the GST return?

1. 30 November 2027, or the date of filing the annual return, whichever is earlier.
2. The return for April 2027, being the month of issuance of the debit note. (correct answer)
3. The return for January 2027, by revising the original return for that month.
4. Within 30 days of issuing the debit note, i.e., by 5 May 2027.

Answer: B — The return for April 2027, being the month of issuance of the debit note.

Explanation. Section 34(4) specifically provides that the details of a debit note must be declared in the return for the month during which it is issued. The return for January 2027 cannot be revised for this purpose. Hence, the debit note issued on 5 April 2027 must be declared in the April 2027 return. There is no extended timeline like the one applicable to credit notes.

Where it goes wrong. Students apply the credit note deadline (30 November) or attempt to revise the original return.

Authority. Section 34(4) of the CGST Act, 2017

Question 11 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Suraksha General Insurance issued a credit note to a registered corporate client for excess premium charged due to a clerical error. The client reversed the ITC. However, the supplier failed to declare the credit note by 30 November following the end of the financial year. What is the consequence?

1. The supplier can declare it in the annual return filed after 30 November.
2. The credit note remains valid indefinitely for the purpose of output tax reduction.
3. The supplier cannot reduce its output tax liability for that financial year. (correct answer)
4. The supplier must pay a penalty of all of the tax involved.

Answer: C — The supplier cannot reduce its output tax liability for that financial year.

Explanation. Section 34(2) mandates that the credit note must be declared by 30 November following the end of the financial year, or the date of filing the annual return, whichever is earlier. If this time limit is missed, the supplier loses the right to adjust the tax liability through that credit note for that financial year. The credit note does not remain valid indefinitely.

Where it goes wrong. Students think the credit note can be declared anytime before the annual return, missing the 30 November cap.

Authority. Section 34(2) of the CGST Act, 2017

Question 12 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Aryan Steels Ltd received a debit note from its supplier for an additional ₹2,00,000 taxable value on raw materials purchased in August 2026, due to a price escalation clause. The debit note was issued on 15 October 2026. Can Aryan Steels claim ITC based on this debit note?

1. No, ITC can only be claimed on a tax invoice, not a debit note.
2. No, the debit note must be issued in the same month as the original invoice.
3. Yes, provided the debit note contains the prescribed particulars and the supplier has paid the tax. (correct answer)
4. Yes, but only after the original invoice is cancelled and a new one is issued.

Answer: C — Yes, provided the debit note contains the prescribed particulars and the supplier has paid the tax.

Explanation. Section 34(3) read with the definition in section 2(38) clarifies that a debit note includes a supplementary invoice. For the recipient, a debit note serves as a valid document to claim input tax credit, provided other conditions of section 16 are met (such as the supplier having paid the tax and the document containing prescribed particulars). It is not restricted to the month of the original invoice.

Where it goes wrong. Students assume that ITC can never be claimed on a debit note, or that the original invoice must be revised.

Authority. Section 34(3) of the CGST Act, 2017; Section 16(2) of the CGST Act, 2017

Question 13 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier issued a credit note for goods returned by a customer in FY 2026-27. The credit note was issued on 10 April 2027. What is the last date to declare it in the GST return?

1. 30 November 2027, or the date of filing the annual return for FY 2026-27, whichever is earlier. (correct answer)
2. 30 November 2028, or the date of filing the annual return for FY 2027-28, whichever is earlier.
3. The return for April 2027, as it is a debit note equivalent.
4. There is no time limit for credit notes issued for goods returned.

Answer: A — 30 November 2027, or the date of filing the annual return for FY 2026-27, whichever is earlier.

Explanation. The time limit for declaring a credit note in the return is linked to the financial year in which the original supply was made, not the year the credit note is issued. The supply was made in FY 2026-27. Therefore, the credit note must be declared by 30 November 2027 (following the end of FY 2026-27) or the date of filing the annual return for FY 2026-27, whichever is earlier.

Where it goes wrong. Students link the deadline to the financial year in which the credit note was issued (FY 2027-28).

Authority. Section 34(2) of the CGST Act, 2017

Question 14 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Which of the following situations does NOT justify the issuance of a credit note under section 34(1) of the CGST Act, 2017?

1. The goods supplied are returned by the recipient due to excess quantity.
2. The supplier wants to provide a pre-supply discount that was not contemplated in the original agreement. (correct answer)
3. The taxable value charged in the tax invoice exceeds the actual taxable value of the supply.
4. The services supplied are found to be deficient by the recipient.

Answer: B — The supplier wants to provide a pre-supply discount that was not contemplated in the original agreement.

Explanation. Section 34(1) allows credit notes where the taxable value/tax exceeds the actual, goods are returned, or services are deficient. While post-sale discounts linked to section 15(3)(b) are permitted, a pre-supply discount that was not part of the original agreement and is given after the invoice would not qualify unless it meets the specific post-supply discount criteria (agreement at the time of supply and ITC reversal). Merely deciding to give a new discount does not justify a credit note.

Where it goes wrong. Students assume any discount can be regularized via a credit note.

Authority. Section 34(1) of the CGST Act, 2017

Question 15 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered supplier issued a credit note for deficient services to an unregistered consumer. The supplier reduced its output tax liability in the return for the month. However, the consumer did not receive any actual refund or benefit from the supplier. What is the legal position?

1. The reduction is valid as long as the credit note is issued within 30 days.
2. The reduction is valid because unregistered consumers cannot claim ITC anyway.
3. The reduction is invalid because the incidence of tax has been passed on to the consumer. (correct answer)
4. The reduction is invalid only if the consumer files a complaint with the department.

Answer: C — The reduction is invalid because the incidence of tax has been passed on to the consumer.

Explanation. The proviso to section 34(2) bars a reduction in output tax liability if the incidence of tax on such supply has been passed on to any other person, in cases where the recipient is not a registered person. If the supplier did not actually refund the amount to the consumer, the tax burden remains on the consumer. Hence, the supplier cannot reduce its liability.

Where it goes wrong. Students ignore the 'incidence of tax' condition for unregistered recipients and focus only on the document issuance.

Authority. Section 34(2) of the CGST Act, 2017

Question 16 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Vikramaditya Tech Labs LLP issued multiple invoices to a single customer during FY 2026-27. Some goods were returned across different months. Can the LLP issue a single consolidated credit note for all such returns?

1. No, a separate credit note must be issued for each original tax invoice.
2. Yes, a consolidated credit note can be issued for multiple invoices in a financial year. (correct answer)
3. No, the credit note must match the serial number of the original tax invoice exactly.
4. Yes, but only if all the returns happened within the same calendar month.

Answer: B — Yes, a consolidated credit note can be issued for multiple invoices in a financial year.

Explanation. Section 34(1) permits the issuance of one or more credit notes for supplies made in a financial year. It does not mandate a one-to-one linkage with individual invoices. Rule 53(1A) requires the credit note to contain the serial number and date of the corresponding tax invoice(s). Therefore, a single consolidated credit note covering multiple invoices across a financial year is legally permissible.

Where it goes wrong. Students assume a strict one-to-one matching between an invoice and a credit note is mandatory.

Authority. Section 34(1) of the CGST Act, 2017; Rule 53(1A) of the CGST Rules, 2017

Question 17 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier issued a debit note for ₹1,18,000 (including 18% GST) in August 2026 for an additional supply made in July 2026. The supplier failed to pay the tax on this debit note by the due date for the August return. What is the rate of interest applicable under section 50?

1. 18% per annum on the tax amount of ₹18,000 from the due date of the August return. (correct answer)
2. 24% per annum on the tax amount of ₹18,000 from the original supply date.
3. 18% per annum on the total value of ₹1,18,000 from the due date of the July return.
4. No interest is applicable if the debit note is declared in the annual return.

Answer: A — 18% per annum on the tax amount of ₹18,000 from the due date of the August return.

Explanation. The debit note creates an additional liability that must be declared in the return for the month of issuance (August 2026). If the tax is not paid by the due date of that return, interest under section 50 applies. The rate is 18% per annum, and it is calculated on the tax amount (₹18,000), not the invoice value, starting from the due date of the August return.

Where it goes wrong. Students calculate interest on the total value including tax, or from the date of the original supply.

Authority. Section 34(4) of the CGST Act, 2017; Section 50 of the CGST Act, 2017

Question 18 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered supplier issued a credit note for an excess tax charge due to the use of a wrong HSN code (charged 18% instead of 5%). The recipient is a registered person who has not yet availed the ITC for the original invoice. Can the supplier reduce its output tax liability now?

1. No, the supplier must wait for the recipient to avail the ITC first.
2. Yes, since the recipient has not availed the ITC, there is nothing to reverse. (correct answer)
3. No, a credit note for a wrong HSN code requires a fresh tax invoice.
4. Yes, but the supplier must pay a penalty for the wrong HSN code.

Answer: B — Yes, since the recipient has not availed the ITC, there is nothing to reverse.

Explanation. The proviso to section 34(2) restricts the reduction of output tax liability only if the ITC attributable to the credit note, 'if availed', has not been reversed. If the recipient has not availed the ITC in the first place, the question of reversal does not arise. The supplier is complimentary to reduce its liability upon issuing the credit note.

Where it goes wrong. Students rigidly apply the 'ITC reversal' condition without accounting for the 'if availed' clause.

Authority. Section 34(2) of the CGST Act, 2017

Question 19 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Nandini Retail Ltd receives a debit note from a supplier for an additional ₹50,000 taxable value on a supply made in FY 2026-27. The debit note is dated 10 May 2027. In which return should Nandini Retail Ltd claim the input tax credit?

1. The return for May 2027, as the debit note is a valid document for ITC. (correct answer)
2. The return for March 2027, by revising the original return.
3. The annual return for FY 2026-27 only.
4. The return for April 2027, as it pertains to the previous financial year.

Answer: A — The return for May 2027, as the debit note is a valid document for ITC.

Explanation. A debit note is treated as a valid document for claiming ITC. For the recipient, the ITC can be claimed in the return for the month in which the debit note is received, subject to the overall time limit under section 16(4) (30 November of the following year or annual return). Since the debit note is dated 10 May 2027, it would be claimed in the May 2027 return.

Where it goes wrong. Students assume the ITC must be claimed in the month of the original supply or cannot be claimed at all.

Authority. Section 34(3) of the CGST Act, 2017; Section 16(4) of the CGST Act, 2017

Question 20 · 2 marks · Taxation - GST Ch 09: Invoicing Ewaybill · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Which of the following is a mandatory particular that must be included in a credit note issued under rule 53(1A) of the CGST Rules?

1. The vehicle number used for transporting the returned goods.
2. The serial number and date of the corresponding tax invoice. (correct answer)
3. The details of the input tax credit reversed by the recipient.
4. The bank account details for the refund of the tax amount.

Answer: B — The serial number and date of the corresponding tax invoice.

Explanation. Rule 53(1A) prescribes the particulars of a credit note. It mandates the inclusion of the serial number(s) and date(s) of the corresponding tax invoice(s) or bill(s) of supply. The vehicle number, ITC reversal details, and bank account details are not mandatory particulars under this rule.

Where it goes wrong. Students confuse the operational details required for internal tracking with the statutory particulars prescribed by rule 53.

Authority. Rule 53(1A) of the CGST Rules, 2017