CREDIT NOTE FOR B2C UNDER GST

 
Dear Sir,
 
The relevant provision of Law are stated below in relation to Credit Note issued under GST Law:
 
Section 34(1)
Where one or more tax invoices have 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 one or more credit notes for supplies made in a financial year containing such particulars as may be prescribed.
 
 
Proviso to sec 34(2) provides:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
 
 
Further Section 43 inter-alia provides
that the details of every credit note relating to outward supply is to be furnished by a registered person for a tax period  in such manner and within such time as may be prescribed and be matched––
(a) with the corresponding reduction in the claim for input tax credit by the corresponding registered person in his valid return for the same tax period or any subsequent tax period; and
(b) for duplication of claims for reduction in output tax liability.
 
On the basis of above provisions, following are important:
 

1. Credit Note can be issue in B2C supplies in any situation provided in Section 34(1) since it nowhere differentiates between B2B or B2C supplies;
2. There is No ITC to be availed by the recipient in B2C Supplies which means that requirement of section 43 as to reduction in corresponding ITC by recipient is not applicable;
3. The most important requirement in issuance of Credit note in B2C supply is ensure that:
   the incidence of tax and interest on such supply should not be passed on to any other person (which means the tax/interest should not be recovered from the customer/any other person or is refunded,if already recovered to the extent it is being reduced by issuing credit note) so that output tax liability of supplier could be reduced in compliance with proviso to section 34(2) and
   there is no duplication of claims for reduction in output tax liability in compliance to section 43.

 
 
Conclusion:
Yes, a Taxable person may issue Credit Note for B2C transaction and correspondingly reduce output tax liability provided the incidence of tax and interest on such supply has not been passed on to any other person and there is no duplication of claim of reduction in output tax liability.
 
I hope this will help!