Section 34 – Credit and Debit Notes
(1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.
Analysis – As per Section 34(1) of CGST Act 2017, credit note can be issued wherein the taxable value or tax charged in invoice is more than the actual tax payable in respect of any supply. Therefore in case of bad debts, Section 34(1) of the Act will come under picture and whether credit note has been raised in such case needs to be checked.