The GSTN has finally deployed the updated functionality in relation to the issuance of a debit note and a credit note against multiple invoices on the Portal. As per the new functionality, details of original invoice(s) number are not required to be mentioned while reporting the Debit/Credit Note.
A brief look into the significant role of Hon’ble Delhi High Court & Sales Tax Bar Associations (Delhi)
Section 34 of the CGST Act as originally introduced provided that Supplier shall report the details of debit/credit notes in Form GSTR 1 along with the corresponding tax invoice number and date. The GSTN portal was also allowing reporting of single invoice against one debit note/credit note. Since it is a usual practice in various industries to issue a single debit/credit note against multiple tax invoices and thus, issuance of separate debit/credit note against each invoice have been creating huge compliance burden on the businesses.
To highlight the issues and difficulties in GST Law and the Portal, Sales Tax Bar Associations (Delhi) filed a Writ Petition No. 9575 of 2017 before the Hon’ble Delhi High Court. The issue of linking of credit note and debit note with separate corresponding invoice was one of the major legal issues raised and argued before the Court in the said petition.
The issue was discussed in the 25th GST Council Meeting and it was noted that “Linking of CN/DN (Credit Note/Debit Note) with invoices is a tedious process and not in conformity with industry practice”. Thereafter the amendment in section 34 of the Act was proposed in the 28th GST Council. Consequently, vide Section 15 of the CGST Amendment Act, 2018, amendment in Section 34 of the Act was brought w.e.f. 01.02.2019, as per which the condition of linking a credit note and a debit note with corresponding invoices had been done away with. It was expected that GSTN portal would update the functionality as per amended Section 34; However for a very long period, the Portal did not update the same and restricted the issuance of a single credit note against multiple invoices.
The delay in deploying the updated functionality was raised several times by STBA before Hon’ble High Court, and the Hon’ble Court after strictly directing the respondents for the deployment of the functionality, ordered them to file an affidavit stating by what time will they be able to deploy the same. The GSTN Portal filed an affidavit in the afore-mentioned petition in December’2019 and stated that the functionality would take appt. 5-6 months more.
However, even after passing of the 5-6 months, the functionality was not deployed. Pandemic caused by the COVID-19 could be taken as a reason for the further delay. However, the functionality has been finally deployed and it is a great relief to all the businesses as the compliances has been made easier.
The matter in the STBA v. Union of India has been actively argued by Adv. Puneet Agrawal (Partner at ALA Legal Associates & Solicitors), Adv. Yuvraj Singh & Adv. Purvi Sinha (Managers at ALA Legal Associates & Solicitors) on behalf of the STBA.
What has changed on the Portal Now?
Earlier, in Form GSTR-1, along with details of Debit/Credit Notes, invoice date and invoice number pertaining to that Debit/Credit Notes was required to be mentioned as a mandatory field. Now, the portal has done away with this mandatory requirement of mentioning invoice date and invoice number while reporting details of Debit/Credit Note.
Yuvraj is an advocate and has completed his B.A. LL.B(Hons) from RGNUL-Punjab. He is a practicing advocate and has been involved in matters pertaining to GST and other indirect taxes as well as Direct Tax. He is active in Writ Courts and has involvement in a few landmark judgments like Pitambra Books Pvt. Ltd. V. Union of India (W.P.C. No. 627 of 2020), and represented Sales Tax Bar Association (Delhi) to resolve GST issues and glitches.