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Invoices under GST

This article discusses the following in detail:

What is a GST Invoice?

A GST invoice is a document which will capture all the relevant details of a business transaction including information about both the parties. It will comprise the product name, description, quantity, details of supplier, purchaser, rate charged, discounts, terms of sale etc.

GST invoice would be the principal document on which other documents such as trial balance, P&L A/C and balance sheet would rest. A purchaser would be able to claim input credit only if the GST invoices are in place.

The GST invoice rule(s), 2016 mandates two kinds of invoices – Tax Invoice and Bill of Supply.

Tax Invoice

A tax invoice is the document, which is issued when a taxable person, supplies any product or service.

A sample GST invoice would look like this:

Invoices under GST

Bill of supply

One of the primary motives of a tax invoice is to charge the tax from the purchaser on government’s behalf. However, there are few exceptions to this in GST, wherein a supplier is prohibited to charge tax and so a normal tax invoice cannot be issued. In such cases, the document which is to be used is called a Bill of Supply. The Bill of supply is issued, in the following cases:

  • When supplying exempted goods or services

  • When supplier is paying tax under composition scheme

Time Limit to Issue an invoice:

The time period to issue an invoice under GST invoice rule (5) varies for different for products and services with some exceptions:

Taxable Goods:

  • Movable: Invoice to be issued before or at the time of removal of goods

  • Immovable: Invoice to be issued before or at the time of delivery of goods or making available to the recipient.

Taxable Services:

 Invoice to be issued in 30 days from the date of supply of services.

Reverse Charge:

A registered taxable person who is liable to pay tax under a reverse charge shall issue an invoice in respect of goods/services received by him, on the date of receipt of goods/services from a person not registered under this act.

Continuous Supply of Services:

  • Due date of payment ascertainable: Invoice to be issued within 30 days from the due date of receiving the payment

  • Due date of payment not ascertainable: Invoice to be issued within 30 days of receiving the payment.

Payment Linked to Completion of Event:

Invoice to be issued within 30 days of completion of an event.

Supply of Services Ceases under a Contract:

The invoice to be issued, when the supply ceases.

Goods Sent on Approval Basis:

  • To be invoiced, before or at the time when it becomes known that the supply has taken place.

  • Six months from the date of removal. Whichever is earlier?

In Case of Banks, NBFC’s and Financial Institutions:

Within 45 days of rendering of the services.

Revised Invoices

Section (23) of the model GST law read with rule 4 of the GST Invoice Rules says that, a registered taxable person may issue a revised invoice against the invoice already issued by him during the period starting from the effective date of  registration till the date of issuance of certificate of registration to him. The revised invoice would enable the recipient to take credit of tax charged in it.

Apart from the above, there are few other technicalities about GST invoicing, which you should know:

  • There is no prescribed format for GST invoicing except some mandatory fields. The GST council has also issued a standard template of invoice [GST INV 01], that indicates these mandatory fields.

  • Retailers have a choice to issue an invoice for up to Rs. 200/-. However, if a customer demands, it is to be issued irrespective of the amount of the invoice.

  • A separate Bill of Supply is not required, if the VAT invoice is issued for non-taxable supplies.

  • The businesses with a turnover of up Rs. 1.5 crore annually are exempt from mentioning the HSN code in their invoices.

Copies of Tax Invoices

Three copies are required, whenever a tax invoice is issued.

Original Copy:

This is the first copy of the invoice for the buyer and labelled as ‘Original for recipient’

Duplicate Copy:

This is for the transporter to be produced, as and when required and labelled as ‘Duplicate for transporter’. However, the transporter does not need an invoice, if the supplier has an invoice reference number, which can be generated from GSTN portal by uploading a tax invoice.

Triplicate Copy:

It is for the suppliers own record.

Once you take the first and major step precisely with the correct invoicing in place, the overall GST process becomes relatively easier. autoTax from Master’s India, a GST Suvidha Provider is a fully automated GST solution, which along with other functionalities also ensures that your invoicing always follow the prescribed GST invoicing guidelines.