De-Linking of Credit or Debit Notes from Invoice

De-linking of Credit or Debit Notes (CDNs) from original invoices was the much-awaited facility that was enabled by the GSTN on 17th September 2020. Before the introduction of delinking of the Credit/Debit Note facility, the taxpayer had to link credit/debit notes to their original invoices while filing GSTR-1 or GSTR-6.

Why De-Linking of Credit/Debit Notes from Invoice Facility was Introduced?

The concept of de-linking of credit/debit notes from invoice was introduced to the taxpayers to provide the following facility:

1. Issuing single credit/debit note for multiple invoices at the time of filing GSTR-1 or GSTR-6,
2. To identify the table to which such credit/debit note belongs to on the basis of the type of supply such as SEZ, deemed export, export, regular
3. The taxpayer can now select Place of Supply (POS) against each credit note or debit note to identify the intra-state or inter-state supply,
4. Debit/Credit Notes can be declared without any taxable rate. This will help the taxpayer to report the debit/credit note value in case if there is any difference in the tax rate. The taxpayer just needs to enter the tax amount in such cases.
5. The Credit/debit notes can be easily amended on the basis of the points listed above.
6. While filing a refund application, taxpayers can now report such credit/debit notes in statements without mentioning the related invoice number. To do so, the taxpayer just needs to choose the document type from a pull-down bar consisting of the invoice, credit note, or debit note.
7. The taxpayer can take the benefit for such change for the following refund applications:

• Export of services with payment of tax.
• Refund for the supply of goods & services without making the tax payment.
• Refund for the supply of goods or services to SEZ after making the tax payment.
• Refund for the supply of goods or services to SEZ without making the tax payment.
• Refund in the case of Inverted duty structure

Advantages of delinking Credit or Debit Notes from Invoices?

De-linking of credit/debit notes will not only reduce the compliance burden but will also help the taxpayers to stay GST compliant.

The taxpayer will not have to provide an invoice number as a reference in every credit/debit note at the time of filing GSTR-1 and GSTR-6.

However, the taxpayer must always keep the invoice number as a reference in their accounts for smooth audits.

How Can GSTrobo® Help You?

GSTrobo® – a division of Binary Semantics is one of the leading ASP-GSP who provides industry-leading GST compliance software such as GST, e-way bill, and e-invoicing software. These solutions not only seamlessly integrate with all the ERPs but also automates most of your GST compliance.