GST Invoicing

 

As India is gearing up to make the switch to GST, there are lots of new rules and regulations to follow when it comes to invoicing. The Government has specified the tax elements that are mandatory to each invoice, and it is absolutely essential that business owners across India update their invoicing processes accordingly.

Thus, invoice is a document based on which the supplier asks for the payment. Furthermore, when such a payment is made, it acts as a document of title for the buyer. Under GST regime, it is mandatory to issue an invoice whenever a supply of goods and serviced takes place.

 

GST invoice format

 

A tax invoice is generally issued to charge the tax and pass on the input tax credit. A GST invoice must have the following mandatory fields. Section 31 of the CGST Act, 2017 mentions the mandatory contents of the invoice.

• Date and Invoice number

• Name of Customer

• Billing Address and Shipping Address of the customer

• GSTIN of Taxpayer and Customer (if registered)

• Place of supply

• HSN Code (Harmonized System of Nomenclature Code)

• Taxable value/applicable discount

• GST rates and total GST charged including details of applicable CGST/SGST/IGST for the item

• Signature of the supplier.

 

Who should issue GST Invoice?

In the case of goods supplied:

• In the case of normal supply, it is to be issued on or before the removal or delivery of goods.

• In case the goods are in continuous supply, then the invoice needs to be issued on or before the payment or issue of the account statement.

In case of the supply of services:

• In general case, the invoice needs to be issued within 30 days from the original date of supply.

• However, in the case of banks and NBFCs, the invoice needs to be issued within 45 days from the date of service.

In case the person has tax liability by way of reverse charge, and it receives goods or services from an unregistered supplier, then, in that case, the invoice needs to be issued on the date of receiving those goods or services.

 

Why is it Important to Issue GST Invoice?

 

 Issuing a GST invoice is important for the following reasons:

1. Acts as proof of supply: GST Invoice acts as proof of supply of goods and services. It maintains transparency and the supplier can demand money based on the accounted details mentioned on the invoice.

 2. Keeps a record of the supply time: GST invoice is issued at the time of supply and GST is charged at the time of the supply. This acts as an indicator of the time of supply.

 3. A taxpayer can claim Income Tax Credit: The purchaser can claim income tax Credit (ITC) based on the GST invoice. The purchaser cannot claim ITC until the possession of the tax invoice or debit note.

 

Types of GST invoice

 

Tax Invoice

Under GST, any registered person supplying goods or services is required to issue Tax invoices to its buyer. This document or invoice that is issued by the supplier to the buyer is known as “Invoice” or “Tax Invoice”.

In case of supply of services, the invoice is to be issued within 30 days from the date of supply. For small dealers,  if the amount of invoice is less than Rs 200, then no invoice is to be issued.
If the amount of invoice exceeds Rs. 200 then it is mandatory to prepare ‘Tax invoice’.

The recipient of goods and services can take the benefit of Input Tax Credit on the basis of this Tax Invoice.
Input Tax Credit means to utilize credit of tax paid on purchases of goods or services against the tax liability which is to be paid.

 

Bill of Supply

There is a new concept in the GST regime of Bill of Supply. A person who has opted for composition scheme or who is supplying exempted goods or services or both is required to issue bill of supply. The recipient cannot claim input tax credit on the basis of Bill of Supply.

If registered person is supplying goods or services of less than Rs.200, it is optional to issue bill of supply. He may choose not to issue bill of supply for these small bills.

 

Receipt Voucher

When registered person receives any advance from the buyer, he needs to issue receipt voucher evidencing receipt of such payment.

 

Refund Voucher

Suppose if the receipt voucher has been issued to the buyer but against which no supply has been made, then the registered person is required to issue the Refund Voucher.

Payment voucher

When a person who is registered under GST, receives any supplies of goods or services from the unregistered person, he needs to issue payment voucher to the supplier at the time of making the payment under reverse charge.
Also a payment voucher is been issued on those transactions on which reverse charge is applicable.

Credit Note

Credit note should be issued by a seller to the buyer in case of goods returned or reduction in value of goods/supplies or both or in case of discount claims. The details of credit note should be declared in the tax return to reduce tax liability. The time limit to issue  credit note is by September following the end of the financial year or the date of filing annual return whichever is earlier.

Debit Note

If seller finds  that he charged less than the actual value of goods or services or both in the invoice, he can issue debit note to the buyer. Seller is required to declare the value of debit note in the GST return of the month during such debit note has been issued.

 

Raising a Revised GST Invoice

 

Under Rule 53 of the CGST Act, 2017, revised tax invoices can be raised against issued invoices. The revision of the GST invoice bill can involve a downward or upward change in the prices of goods or services supplied. It can also lead to a change in the CGST/SGST/IGST rates, previously applied to this bill.

The following particulars must be present in a revised GST invoice – 

• ‘Revised Invoice’ should be marked wherever applicable on this bill.

• GSTIN, address and name of the supplier.

• Date of document issue.

• Nature of document.

• Name, GSTIN/UIN and address of a registered recipient.

• Date and serial number of the corresponding GST invoice.

• Shipping address and details.

• A unique and consecutive serial number, which does not exceed 16 characters.

• Signature of the issuer or authorised representative.

 

 

DISCLAIMER-These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.

It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information.

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