Credit notes issued under Section 34 must be deducted from adjusted total turnover for refund calculation; ignoring them would artificially inflate turnover: GSTAT Kolkata

The Tribunal held that when goods are returned and a credit note is issued, the returned goods are no longer part of the supply and the taxable turnover must be adjusted accordingly.

In two connected Revenue appeals against the same tea trading company, the GSTAT Kolkata Bench has upheld the deduction of credit notes amounting to Rs. 39,58,490 from the adjusted total turnover for refund calculation under both Rule 89(5) for inverted duty structure and Rule 89(4) for exports [Commissioner v. M/s Rajshahi Banijya Pvt Ltd — APL/112 & APL/113].

The Bench of Sunil Kumar Singh (Judicial Member) and Bijoy Kumar Kar (Technical Member) verified the credit note entries against the GSTR-1 statements and the Chartered Accountant's certificate, finding that all notes matched and were issued within the time limit under Section 34(2).

The Revenue had contended that the original invoice details were left blank in GSTR-1 and the credit notes could relate to earlier periods. The Tribunal rejected this, observing that on plain reading of Section 34(1), when goods are returned after supply, a credit note is issued and the taxable turnover must be adjusted — ignoring such notes would artificially enhance the turnover despite the taxable value having already been reduced by operation of law.

Both Revenue appeals were dismissed.

2026-juristway.com-2950-GSTAT(Kolkata)-GST & 2026-juristway.com-2951-GSTAT(Kolkata)-GST  |  GSTAT, Kolkata  |  APL/112/KLK/2026 & APL/113/KLK/2026  |  14.10.2026