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Consolidated Credit Debit note would bring us a huge relief: says Small Businessmen

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Earlier, a credit debit note which is issued by the registered businessman should be submitted invoice-wise, which is highly impractical for businessmen who have to correlate with one to one underlying invoice. This increases compliance burden for taxpayers, especially for the ones following pen and paper method of bookkeeping denying to use faster business accounting software.

Latest Update On Consolidated Credit Debit Note: 
Update as on 14th September 2020*
Good news for Taxpayers: Now GSTN has finally enabled the much awaited facility to report consolidated credit debit note under GST in GSTR-1 on GST portal.

Updated as on 14th September, 2020

Under the relaxation given through the amendment in Section 34, a taxpayer can now issue a consolidated credit debit note against one or more tax invoices raised in a financial year. 

1.) Before a consolidated/single credit debit note against one or more tax invoices option available on GST portal.
Before the option available on GSTN portal a registered person needs to furnish the “Original date and number of the tax invoice” in order to report credit debit note issued under GST in his GSTR-1.
Check the screenshot of Table-9B for better understanding:

2.) After implemented the option to issue a consolidated/single credit note, against one or more tax invoices raised in a financial year, on GST portal.
Now the GST portal doesn’t ask for “original date and number of the tax invoice” as credit debit note is delinked from original invoice on the common portal.
Check the screenshot for better understanding:

Even though this was amended vide CGST amendment Act, 2018 with the effect of February 1, 2019 but “giving effect to any amendment under GST law is a one thing and to make it technically implemented for the benefit for taxpayers on GSTN portal is totally different thing.”

# Further details on Delinking of Credit Note / Debit Note from invoice, while reporting them in Form GSTR 1/GSTR 6 or filing Refund-

1.) Till now, original invoice number was mandatorily required to be quoted by the taxpayers, while reporting a Credit Note or Debit Note in Form GSTR-1 or Form GSTR-6.

2.) The taxpayers have now been provided with a facility on the GST Portal to:

  • Report in their Form GSTR-1 or in Form GSTR-6, single credit note or debit note issued in respect of multiple invoices
  • Choose the note supply type as Regular, SEZ, DE, Export etc., to identify the table to which such credit note or debit note pertains
  • Indicate Place of Supply (POS) against each credit note or debit note, to identify the supply type i.e. Intra-State or Inter-State
  • Debit Credit Notes can be declared with tax amount, but without any taxable value also i.e. if credit note or debit note is issued for difference in tax rate only, then note value can be reported as ‘Zero’. Only tax amount will have to be entered in such cases.
  • Similar changes have been made while reporting amendments to credit note or debit note

3.) Corresponding changes have also been made in refund module. Thus, while applying for refund, taxpayers can now report such credit notes or debit notes in statements (filed during filing the refund application) without mentioning the related invoice number. The taxpayer would be required to select the document type from a drop-down comprising of invoice/ debit note/ credit note.

4.) The change has been provided while filing refund application of following types/ cases:

  • Refund for export of services with payment of tax
  • Refund on account of goods & services without payment of tax
  • Refund on account of supply of goods or services to SEZ with payment of tax
  • Refund on account of supply of goods or services to SEZ without payment of tax
  • Refund on account of Inverted duty structure

Updated as on 13th March, 2019*

The amendment to issue single debit credit note against multiple tax invoices is a boon for the taxpayers as the registered person can now issue a consolidated credit note or debit note against multiple tax invoices. Businesses can avail this facility to overcome the administrative challenges faced during linking the individual credit debit notes with their respective invoices earlier. 
It also helps businesses to improve the work quality as they need to spend more time, money, and effort to maintain the records of credit or debit notes with meagre amounts.

Understand it better with example: Before the amendment under Section 34 Mr. Y has to issue 5 credit notes with their respective invoices, however, after the amendment, he may issue one consolidated credit note for 5 tax invoices in that particular financial year.

However, despite the above amendment in the CGST Act, 2017, the GSTN portal did not have a functionality to link multiple invoices with a single credit note or debit note. In this regard, the de-linking of original invoices and credit debit notes on GST portal is a much awaited facility by each and every taxpayer.

Update as on 29th January, 2019*

The GST Council in its 28th meeting held on July 21, 2018, recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act, 2017. These amendments were passed by the Parliament and got published in the official Gazette of India on August 30, 2018, after receiving the assent of the Hon’ble President of India on August 29, 2018, as the CGST Amendment Act, 2018, IGST Amendment Act, 2018, UTGST Amendment Act, 2018 and the GST (Compensation to States) Amendment Act, 2018, respectively. 
Most of the amendments to the GST law passed by the Parliament in August 2018 took effect from February 1, 2019.

Now, Section 34 of the CGST Act, 2017 (“the CGST Act”) has been amended to allow registered persons to issue consolidated credit debit notes in respect of multiple invoices issued in a Financial Year. This will bring huge relief  to taxpayers at large, effective from February 1, 2019.

Pre-amendment, Section 34 of the CGST Act mandates a registered person to issue one credit debit note for each single invoice. Considering the difficulties and to facilitate ease of doing business, amendment has been carried out in Section 34 of the CGST Act (effective from February 1, 2019), which permits a registered person to issue consolidated credit debit note in respect of multiple invoices issued in a financial year without linking the same to individual invoices

Updated as on 26th July, 2018*

Hence it is proposed to the parliament to allow issuance of consolidated credit debit which is in line with the best international practices.

  • This amendment seeks to permit a registered businessman to issue consolidated credit debit notes in respect of multiple invoices issued in a Financial Year without linking the same to individual invoices to reduce the compliance burden for taxpayers.
  • This amendment is taxpayer friendly and expected to bring relief.
  • The proposed Amendment will require parliamentary approval and State Legislatures assent for their respective sgst act.

While a large number of businessmen will be benefitted and relieved from unnecessary tax burden with this proposal of consolidated debit credit note being accepted, It is always recommended for businessmen to use digital tools like Vyapar. With Vyapar, FREE business accounting software, one can easily manage sale transactions through which invoice-wise credit/debit note or fetching a consolidated one is as easy as mouse clicks. Click Here to download vyapar.


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