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GST (Goods and Services Tax) is more than a year old now and right from its inception we have seen a lot of changes and amendments in the law. Most of the taxpayers are familiar with GST Laws by now as the procedures have been much more streamlined. But still there are certain factors which require your consideration while dealing in GST.
One of the important and common issue in GST is of incorrect invoices or inappropriate invoice format. Many of taxpayers perform numerous errors in GST invoices due to lack of understanding about the law relating to GST invoicing and GST Rules. As invoice is important to avail GST credit (ITC), incorrect invoice might obstruct GST credit availment. Thus it is of paramount importance to
If in case taxpayer does not issue such an invoice to his GST registered customer, his customer loses the ITC claim. Which in turn, adds up to the cost of customer and the taxpayer eventually loses its customers.
We take you to some of the important aspects of GST invoicing to throw more light on the topic.
GST invoice is required to be issued by a registered taxpayer. The taxable invoice will only entitle the purchaser or receiver to claim input tax credit (ITC). There is no specified or fixed format for the invoice but certain prescribed information shall be mentioned on the face of GST invoice.
Non registered dealers or composite taxpayers are required to issue Bill of Supply and are not eligible to issue GST invoice to their clients.
A Goods and Service Tax (GST) invoice shall clearly disclose the following:
Certain people have confusion regarding the timing of issuing GST invoice. Whether invoice should be issued first and then the goods are to be supplied or goods are to be delivered first and then invoice should be issued? The answer differs from case to case. Let us end this confusion by taking a close look at various events and the timing of issue of invoices under each of them.
When goods are supplied by a registered taxpayer the invoice is required to be issued either
Below are the various time limits to issue GST invoice under different situations.
| Category of Supply | Time limit |
|---|---|
| Movable goods |
Invoice shall be issued at the time of
|
| Non-movable goods |
In case of Non Movable Goods Invoice shall be issued at the time of
|
| Continuous supply of goods |
For continuous supply invoice shall be issued
|
| Goods sent on approval | Invoice shall be issued
|
A registered person supplying taxable services shall
shall issue a tax invoice.
As per Section 31 of CGST Act 2017 a valid tax invoice shall have the following details
From the above discussion it can be concluded that tax invoice must be issued at the earliest of any of the following time periods:
Note: The extended time limit of 45 days is available in case of Banking / NBFC or Insurance companies
To summarise we can understand the above discussion in an easy manner as under
| Type of supply | Particulars | Invoice shall be issued |
|---|---|---|
| Supply of Goods | Involving movement of goods | Before or at the time of removal |
| When no movement of goods | At the time of delivery or making available thereof to the recipient | |
| When goods sent on approval | (a) Before or at the time of supply (b) 6 Months from the date of removal (whichever is earlier) |
|
| In case of continuous supply | Before or at the time of each successive:- (a) Statements of accounts is issued or (b) Payment is received |
|
| Supply of Services | General services | Within 30 days from the supply of services |
| Banking, insurance | Within 45 days from the supply of services | |
| In case of continuous supply of services | ||
| (a)due payment date is ascertainable with the contract | On or before the due date of payment | |
| (b) due payment date is not ascertainable with the contract | before or at the time of recipient of payment | |
| (c) Payment is linked to the completion of an event | on or before the completion of that event | |
Though it is always a good practice to issue GST invoice for any amount, however as per GST Act [Sec 31(3) (b)] read with rules, a tax invoice need not be issued when the value of the goods or services supplied is less than INR 200, if -
In case if the recipient demands for the invoice, the same should be issued irrespective of the amount involved.
GST law requires taxpayers to issue specified number of tax invoice copies. Lets have a look at number of invoices we have to issue
Below is the table explaining, number of invoices to be issued in a simplified manner
| In case of Supply of Goods | In case of Supply of Services | |
|---|---|---|
| Original invoice: | The original invoice is issued to the receiver. A buyer gets the first copy of the invoice, marked as ‘Original for Recipient’. | The original invoice is issued to the receiver. A buyer gets the first copy of the invoice, marked as ‘Original for Recipient’. |
| Duplicate copy: | The duplicate copy is for the transporter, and is marked as 'Duplicate for transporter'. If the supplier has Invoice reference number, then duplicate is not required.It is given to a supplier when he uploads a tax invoice issued by him in the GST portal. It is valid for 30 days from the date of upload of invoice. | The duplicate copy is for the supplier, and is marked as 'Duplicate for supplier'. |
| Triplicate copy: | This copy is retained by the supplier for his own record, and is marked as 'Triplicate for supplier'. | - |
A GST Invoice which does not abide by the GST laws and rules is known as invalid invoice. Hence, it becomes important for us to understand about the correct GST Invoice format.
But, to our surprise, there is no such framework prescribed under the law. Instead, the law has laid down the list of particulars to be included in a valid GST Invoice.
As per CGST Rules, 2017, a Tax Invoice shall contain the following particulars, namely,-
Particulars of an export invoice are same as a tax invoice.However , where recipient is unregistered and value of supply is Rs.50000 or more, instead of name of state and its code, in case of an export invoice,name of the country is to be mentioned. In addition to this the following pointers shall be adhered:
As per GST Rules, in the case of the export of goods or services, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX”
or“SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, as the case may be.
Shipping Bill is also important document which should be accompanied with Export Invoices. As per GST Law, exporter is eligible to get refund of accumulated Input Tax Credit (ITC) pertaining to the tax period. GST authorities give utmost importance to shipping bills for processing refund applications. Thus one must take care to see that export invoices are always accompanied with respective shipping bill for refund application.
As per Sec 31(3)(c) of CGST Act 2017, a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed:
Thus, as per combined reading of GST Act with GST rules, Bill of Supply is to be issued by a registered supplier in the following cases:
Similar to tax invoice, a bill of supply need not be issued when the value of goods or services supplied is less than INR 200, unless the receiver insists for the bill. However, a consolidated bill of supply should be prepared at the end of the business day for all such supplies for which the bill of supply is not issued.
Note :- However composition taxable person , shall mention the words “Composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply.
Where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single “invoice-cum-bill of supply” may be issued for all such supplies.
As per Rule 36(2) of CGST rules, Input tax credit shall be availed by a registered person only if all the applicable particulars are contained in the said document.
But, if the said document does not contain all the specified particulars but contains
Input tax credit may be availed by such registered person.
Thus, if all required particulars are not present in GST invoice, then ITC (Input Tax Credit) availed on such invoice need to be reversed.
As per sec 31(3)(d), the registered person shall, upon receipt of advance payment issue a receipt voucher or any other document. Such document shall contain the prescribed particulars confirming receipt of such payment.
Thus once a Seller or supplier receives advance, then he shall issue receipt voucher.
Where an advance payment has been received, but subsequently no supply is made, a refund voucher against such payment shall be issued.
In some of the below specified cases transportation of Goods shall be made without Issue of invoice, when
In all of the above cases delivery challan shall be issued in place of tax invoice.
Debit Note (also called supplementary invoice) is issued by the seller. Debit note is issued in addition to tax invoice when due to some reason an additional amount is required to be paid later on.
This situation arises mainly due to two reasons, when original invoice has been issued
Credit Note is issued by the seller at the time when the amount payable by the buyer decreases than invoice already issued.
This situation arises mainly due to two reasons, when original invoice has been issued
In case the turnover exceeds Rs 1.5 cr, HSN code shall be mentioned on the GST tax invoice.
But, in the case of exporters there is no exemption and HSN / SAc code shall be mentioned irrespective of turnover threshold.
Yes, quantity in case of goods and unit or Unique Quantity Code thereof is required to be mentioned in case of GST invoice. Here Unique Quantity Code refer to unit of measurement in simple terms. For example Kgs, Dozens, units, bundles etc.
As per Circular No. 90/09/2019-GST dated 18th February, 2019 all registered persons making supply of goods or services or both in the course of inter-State trade or commerce need to specify the place of supply along with the name of the State in the tax invoice.
