diff --git a/erpnext/patches.txt b/erpnext/patches.txt
index 994d6ca5bee..7a95a56d7b1 100644
--- a/erpnext/patches.txt
+++ b/erpnext/patches.txt
@@ -673,3 +673,4 @@ erpnext.patches.v12_0.set_italian_import_supplier_invoice_permissions
 execute:frappe.reload_doc("HR", "doctype", "Employee Advance")
 erpnext.patches.v12_0.move_due_advance_amount_to_pending_amount
 erpnext.patches.v12_0.set_multi_uom_in_rfq
+erpnext.patches.v12_0.update_state_code_for_daman_and_diu
diff --git a/erpnext/patches/v12_0/update_state_code_for_daman_and_diu.py b/erpnext/patches/v12_0/update_state_code_for_daman_and_diu.py
new file mode 100644
index 00000000000..7450e9cd8c0
--- /dev/null
+++ b/erpnext/patches/v12_0/update_state_code_for_daman_and_diu.py
@@ -0,0 +1,22 @@
+import frappe
+from erpnext.regional.india import states
+
+def execute():
+
+	company = frappe.get_all('Company', filters = {'country': 'India'})
+	if not company:
+		return
+
+	# Update options in gst_state custom field
+	gst_state = frappe.get_doc('Custom Field', 'Address-gst_state')
+	gst_state.options = '\n'.join(states)
+	gst_state.save()
+
+	# Update gst_state and state code in existing address
+	frappe.db.sql("""
+		UPDATE `tabAddress`
+		SET
+			gst_state = 'Dadra and Nagar Haveli and Daman and Diu',
+			gst_state_number = 26
+		WHERE gst_state = 'Daman and Diu'
+	""")
\ No newline at end of file
diff --git a/erpnext/regional/india/__init__.py b/erpnext/regional/india/__init__.py
index 0ed98b74eef..d6221a80aa2 100644
--- a/erpnext/regional/india/__init__.py
+++ b/erpnext/regional/india/__init__.py
@@ -10,8 +10,7 @@ states = [
  'Bihar',
  'Chandigarh',
  'Chhattisgarh',
- 'Dadra and Nagar Haveli',
- 'Daman and Diu',
+ 'Dadra and Nagar Haveli and Daman and Diu',
  'Delhi',
  'Goa',
  'Gujarat',
@@ -50,8 +49,7 @@ state_numbers = {
  "Bihar": "10",
  "Chandigarh": "04",
  "Chhattisgarh": "22",
- "Dadra and Nagar Haveli": "26",
- "Daman and Diu": "25",
+ "Dadra and Nagar Haveli and Daman and Diu": "26",
  "Delhi": "07",
  "Goa": "30",
  "Gujarat": "24",
diff --git a/erpnext/regional/india/gst_state_code_data.json b/erpnext/regional/india/gst_state_code_data.json
index 6dab81d6688..ff88e0f9d6c 100644
--- a/erpnext/regional/india/gst_state_code_data.json
+++ b/erpnext/regional/india/gst_state_code_data.json
@@ -134,15 +134,10 @@
   "state_code": "DL",
   "state_name": "Delhi"
  },
- {
-  "state_number": "25",
-  "state_code": "DD",
-  "state_name": "Daman and Diu"
- },
  {
   "state_number": "26",
   "state_code": "DN",
-  "state_name": "Dadra and Nagar Haveli"
+  "state_name": "Dadra and Nagar Haveli and Daman and Diu"
  },
  {
   "state_number": "22",