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

A credit note reduces the value of an earlier invoice; the seller issues it for returns, discounts or overbilling, and it lowers what the buyer owes. A debit note increases the value; the seller issues it for under-billing or extra charges. Buyers also raise debit notes on suppliers for shortfalls, which mirror the supplier's credit note. In VyaparKit both link to the original document.

When does a seller issue a debit note?

Under Section 34(3) of the CGST Act, a seller issues a debit note when the taxable value or tax charged on an invoice is less than what is actually payable, for example after a price revision, a short-billed quantity, or freight, packing or interest charges added later. The debit note carries GST and is reported in GSTR-1 as a supplementary invoice.

Can I raise a debit note against a purchase bill?

Yes. Open the purchase bill and choose Debit Note under Create from this bill. Enter the shortfall, damaged quantity or excess amount billed. VyaparKit reduces the vendor's balance by the note's total, so the payables statement shows what you will actually pay. Send the PDF to the supplier so they issue a matching credit note.

Does a debit note reduce what I owe a vendor?

Yes, when raised against a purchase bill. The vendor ledger records the debit note as a reduction in the payable, and the payables statement and vendor payment reflect the lower amount. The supplier should issue a credit note on their side for GST purposes; your input credit is adjusted based on that.

Is there a time limit for issuing a debit note?

Unlike credit notes, GST law sets no deadline for issuing a debit note, because it increases tax payable and the government is not losing revenue. The buyer's input credit on a debit note is now tied to the debit note's own date rather than the original invoice's financial year. Check with your CA on the ITC timing for your case.

Is a debit note the same as a supplementary invoice?

For GST purposes, yes. Section 34 uses the term debit note for the document a supplier issues to charge additional value or tax on an earlier invoice, and it is treated as a supplementary invoice with the same reporting in GSTR-1. VyaparKit's debit note carries the invoice reference, HSN or SAC and tax split so it serves as one.

Does the buyer need to accept a debit note?

A seller's debit note under GST does not need formal acceptance, but the buyer will only claim the extra input credit if the note appears in their GSTR-2B and matches their records, so agree the reason first. A buyer's debit note on a supplier is a claim; the supplier acknowledges it by issuing a credit note or adjusting the next bill.

Debit Note

Issue a debit note against an invoice or purchase bill for extra charges or short supply. Updates customer or vendor balance. Free GST-compliant PDF.

Free account · 5 documents a month freeMade for India · ₹, GST, UPI, WhatsApp

In short

A debit note increases the amount of an earlier document: a seller issues it against an invoice when the value or tax charged was too low, and a buyer issues it against a purchase bill for short supply, damaged goods or overbilling to reduce what they owe. VyaparKit's debit note generator links to the original document, applies the right GST, updates the customer or vendor ledger, and produces a numbered PDF.

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Sign in once with Google or email. Your business name, GSTIN, logo, bank details and saved customers fill in automatically. Download a PDF or share a link on WhatsApp. 5 documents a month are free, forever.

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✓Beautiful PDF with your logo and details
✓GST calculated automatically where applicable
✓Saved customers, vendors and items, so no retyping
✓Share link with WhatsApp button and UPI QR
✓Converts to related documents in one click

About the debit note tool

A debit note travels in two directions. As a seller, you issue one when an invoice under-charged: the price was revised upward after supply, a line was short-billed, or freight and other charges were missed, and Section 34(3) of the CGST Act treats it as a supplementary invoice. As a buyer, you raise a debit note on your supplier when goods arrive short or damaged or the bill is higher than the PO, telling them you are paying less and why.

Manual debit notes often lack the original invoice reference, mix up the tax head, or, on the purchase side, are never reflected in what you actually pay, so vendor balances stay wrong. VyaparKit's debit note has an Against invoice field, a Reason selector (Additional charges, Price revision, Short billing, Other), and it inherits the CGST and SGST or IGST split of the original document. On the purchase side, create it from a purchase bill with Create from this bill. Notes run in a DN/26-27 series.

Debit notes against your invoices increase the customer's ledger balance; debit notes against purchase bills reduce the vendor's balance in the vendor ledger and payables statement. Share the PDF on WhatsApp so the other side can match it in their books. Free accounts include 5 notes a month across receipts, vouchers and notes.

How to raise a debit note

1
Start from the original document
Open your GST, tax or service invoice and choose Debit Note under Create from this invoice; or open a purchase bill and choose Debit Note under Create from this bill.
2
State the reason
Select Reason: Additional charges, Price revision, Short billing or Other, and explain it in Notes, for example '5 cartons short against PB/26-27/0031'.
3
Enter the difference
Click Add line for the extra charge or the shortfall with HSN/SAC, Qty and Rate. Tax follows the original document's CGST/SGST or IGST split.
4
Create the note
Click Create DN. Against an invoice the customer's balance rises; against a purchase bill the vendor's balance falls.
5
Send it
Download PDF or WhatsApp it to the other party. Sellers report debit notes in GSTR-1; buyers keep them for GSTR-2B reconciliation.

What a debit note must contain (Rule 53)

The words 'Debit Note' and your name, address and GSTIN.
Consecutive serial number (DN/26-27/0001) unique for the financial year, and the date.
Name, address and GSTIN of the other party.
Number and date of the original invoice or purchase bill it relates to.
Description of the additional charge, price difference or shortfall, with HSN or SAC.
Taxable value of the difference and the CGST, SGST or IGST on it.
Reason for the note, such as price revision or short supply.
Signature or digital signature of the person issuing it.

Who uses the debit note

Steel trader with price escalation

Rates rise between order and delivery; the trader issues a debit note for the difference against the invoice, with IGST for the out-of-state buyer.

Retailer receiving short supply

A Delhi retailer finds 5 cartons missing from a 100-carton bill and raises a debit note on the supplier, reducing the payable.

Logistics company adding detention charges

Truck detention at the consignee's site is billed through a debit note against the original freight invoice.

Manufacturer rejecting damaged raw material

Damaged material is returned with a debit note against the purchase bill, so the vendor ledger shows the correct balance.

Debit Note: frequently asked questions

What is the difference between a credit note and a debit note?: A credit note reduces the value of an earlier invoice; the seller issues it for returns, discounts or overbilling, and it lowers what the buyer owes. A debit note increases the value; the seller issues it for under-billing or extra charges. Buyers also raise debit notes on suppliers for shortfalls, which mirror the supplier's credit note. In VyaparKit both link to the original document.
When does a seller issue a debit note?: Under Section 34(3) of the CGST Act, a seller issues a debit note when the taxable value or tax charged on an invoice is less than what is actually payable, for example after a price revision, a short-billed quantity, or freight, packing or interest charges added later. The debit note carries GST and is reported in GSTR-1 as a supplementary invoice.
Can I raise a debit note against a purchase bill?: Yes. Open the purchase bill and choose Debit Note under Create from this bill. Enter the shortfall, damaged quantity or excess amount billed. VyaparKit reduces the vendor's balance by the note's total, so the payables statement shows what you will actually pay. Send the PDF to the supplier so they issue a matching credit note.
Does a debit note reduce what I owe a vendor?: Yes, when raised against a purchase bill. The vendor ledger records the debit note as a reduction in the payable, and the payables statement and vendor payment reflect the lower amount. The supplier should issue a credit note on their side for GST purposes; your input credit is adjusted based on that.
Is there a time limit for issuing a debit note?: Unlike credit notes, GST law sets no deadline for issuing a debit note, because it increases tax payable and the government is not losing revenue. The buyer's input credit on a debit note is now tied to the debit note's own date rather than the original invoice's financial year. Check with your CA on the ITC timing for your case.
Is a debit note the same as a supplementary invoice?: For GST purposes, yes. Section 34 uses the term debit note for the document a supplier issues to charge additional value or tax on an earlier invoice, and it is treated as a supplementary invoice with the same reporting in GSTR-1. VyaparKit's debit note carries the invoice reference, HSN or SAC and tax split so it serves as one.
Does the buyer need to accept a debit note?: A seller's debit note under GST does not need formal acceptance, but the buyer will only claim the extra input credit if the note appears in their GSTR-2B and matches their records, so agree the reason first. A buyer's debit note on a supplier is a claim; the supplier acknowledges it by issuing a credit note or adjusting the next bill.