The Goods and Services Tax (GST) model law defines specific time limits within which tax invoices, debit notes, and credit notes have to be issued. Every taxpayer needs to adhere to these timelines and be aware of how these time limits are applied in different cases. In this article, we will briefly discuss:
Every GST registered person who supplies goods taxable goods has to issue a GST compliant invoice with the description, value, and quantity of goods, the amount of tax charged on the goods, and any other prescribed particulars. The time frame available to issue these invoices is –
In the case of:
The GST invoice has to be issued before removing the goods from the supplier’s place of business. In other words, the invoice here has to be issued before the goods are sent to the buyer.
The GST invoice should be issued on or before the date of delivery of the goods.
When there are successive statements of accounts issued and consecutive payments are involved, the supply is considered as a continuous supply. Here the invoices have to be issued before or at the time when each statement is issued or before each payment is received.
To understand this, we must first understand what the terms ‘Credit Note’ and ‘Debit Note’ mean.
When goods supplied to the consumer are returned, or the value of the invoice is revised because the goods/services do not match the required standards, then a credit note or debit note is issued by the receiver or the supplier of the goods or services.
There are two prominent cases in which a credit note or debit note are issued:
- When the amount that the buyer has to pay to the seller reduces. – Here, a Credit note is to be issued.
- When the amount that the buyer has to pay to the seller increases. – Here, a Debit note is to be issued.
Credit Notes and Debit Notes should be issued:
- On or before the 30th day of September of the financial year, which follows the year in which the goods or services were offered or
- On or before the date on which the relevant annual returns for the financial year are filed – whichever of the two is earlier.
An important point to remember here is that GST Annual Return has to be filed under section 30(2) latest by the 31st of December of the financial year, which comes after the relevant financial year.
Example: If the annual return is filed by 29 September, the last date to issue credit/debit notes will be 29 September.
In the case of services, the tax invoice can be issued before or after the provision of the service. Here, it is important to note that if the invoice is to be issued after the service is provided, then it must be done within 30 days from the date of supply of service. This limit of 30 days is modified to 45 days if the service provider is an insurer/banking company/financial institution or NBFC.