What is Credit Note?
A credit note reduces what a client owes you on an invoice you have already issued. Under GST, a registered supplier issues a credit note when the taxable value or tax charged on an invoice turns out to be too high, for instance because of a post-sale discount, deficient service or a partly cancelled order. The credit note refers to the original invoice and records the reduction.
For export invoices under LUT there is usually no tax to reverse, but the reduction in value still needs to be documented properly in your books and GST returns.
Why it matters for exporters
On the EDF, each invoice is reported with its amount and net realisable value (NRV). If a client later negotiates a discount and you issue a credit note, the amount you finally realise will be lower than the invoice value shown on the EDF. That gap shows up when the bank tries to close the EDPMS entry. Keep the credit note, the client's confirmation and the revised realisable figure together so you can explain the difference. Our fact sheet does not describe a separate procedure for this, so ask your AD bank how it wants the reduction documented.
Example
Bluefin Analytics LLP invoices a Singapore client USD 10,000 on 8 October 2026 and reports it in its October EDF. In December the client points out that one dashboard was dropped from scope, and both agree to a USD 1,500 reduction. Bluefin issues credit note CN-007 for USD 1,500 against the original invoice. The client pays USD 8,500. Bluefin sends the bank the invoice, credit note and FIRA so the entry can be matched. You can draft one with the credit note tool.
Common confusion
A credit note reduces value; a debit note increases it. A credit note is also not the same as a write-off, where you simply cannot recover money you are still owed. See credit notes, discounts and short payments on the EDF.