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A credit note reduces what a customer owes — a return, an overcharge, a post-sale discount. A debit note increases it, typically where the original invoice undercharged.
The direction of the adjustment decides which one, and the party issuing it is normally the supplier in both cases.
Under GST both are reportable documents that adjust the tax already charged, and therefore adjust your liability and your customer's input credit.
Issuing the wrong one, or adjusting an invoice by editing it instead, breaks the audit chain and creates a mismatch that surfaces in reconciliation — usually at the customer's end first.
No. It breaks the audit chain and creates a reconciliation mismatch at the customer's end.
For GST adjustment purposes, yes. Confirm the current limit with your consultant.
Normally the supplier, where the original invoice undercharged.
Half an hour with your own data usually saves reading three of these. The guides will still be here afterwards.