The GST Council has eased rules on credit notes, offering major relief to businesses, especially FMCG firms. Earlier, companies had to link every credit note with a specific invoice, creating massive compliance challenges for manufacturers, wholesalers, dealers, and retailers.

This was particularly burdensome for products with short shelf lives, such as toothpaste, where unsold stock is often returned. Large firms like HUL and Colgate had to reconcile billions of records. Under the new rules, credit notes no longer need invoice linkage, reducing paperwork and improving cash flow.

The reform also relaxes conditions on post-sale discounts, allowing tax benefits without prior agreements. Industry experts say the move aligns GST with business practices and benefits sectors beyond FMCG.