GST Invoicing

What is GST Invoice ?

A GST invoice is a bill or receipt of goods and services required to be issued as it is a document which evidences supply of goods and services and becomes the reason for a charge of tax. A GST invoice bill displays the amount of taxes imposed on each product or service, which an individual purchases from the seller or provider. Invoicing forms an important function when it comes to the purpose of performing a transaction.

Format of the GST Bill

According to Section 2(66) of the Central Goods and Services Tax Act of 2017, to know the exact format of a tax invoice, one must refer to Section 31. Although Section 31 draws a general guideline for GST invoice formats, it does not go into details. However, Section 31 does state the requirements that an invoice must have to be certified as an official GST document. The invoice can be electronic, as well as manual. The GST Invoice Bill must include all the supplementary bills or invoices. Any revisions to the invoice created by the supplier in the past must be documented in the invoice and the invoice should be issued by an input distributor.

Content of a Tax Invoice

As per Section 31/Rule 46 of CGST Act, 2017, GST Tax Invoice must include these following particulars:

  • GSTIN, name and address of the supplier issuing a GST invoice
  • Date of issue
  • Unique serial number not exceeding 16 digits
  • Full details of all services or goods provided with complete HSN code
  • Taxable Supply of goods or services taking into account discount(if any)
  • Rate & Amount of tax charged (CGST, SGST & IGST)
  • Total value of supply of goods or services
  • Name, Address & GSTIN of recipient (if registered)
  • Name, Address of recipient and Address of Delivery with State & its code (if un-registered and value of taxable supply is 50,000 or more)
  • Place of Supply with State Name
  • If tax is payable on reverse charge or forward charge
  • Signature of the supplier or authorized representative.

The generation of a GST invoice for goods shipped or services rendered can be difficult in certain cases. To ease the process, the Indian Government has made a general time limit for suppliers to follow. For normal goods, the supplier has to make an invoice on or before the date of removal of mentioned products.

When to issue a GST Invoice?

Supply of Services

In case of taxable supply of services, invoice referred in Rule 46 shall be issued within 30 days from the date of supply of service.

Continuous Supply of Goods

If the invoice is concerned to a recipient with whom the supplier maintains a constant order of business, then the latter can provide a GST invoice on or before the account statement is generated or payment is received.

Continuous Supply of Services

Continuous supply of services means a supply of services which is provided continuously under a contract for a period exceeding 3 months with periodic obligations. In such case,

  • Invoice shall be issued on or before the due date of payment if the due date of payment can be determined from contract
  • Invoice shall be issued on or before the completion of the event if payment is linked to the completion of event
  • Invoice shall be issued on or before the time of payment received by supplier if due date cannot be determined by contract

Banking Company and NBFCs

The time limit for providing a GST receipt is 45 days from the date of supply of service. Copies of Invoices for Supply of Goods

Copies of Invoices for Supply of Goods

In case of raising a GST invoice for supply of goods, the issuer will have to lay out three copies for the following members involved in such transactions:

  • An original copy for the recipient
  • A duplicate copy for the use of individuals responsible for transporting said goods from supplier to recipient and
  • A third copy for the supplier.

Copies of Invoices for Supply of Services

As there is no transporter involved in a supply of service, issuers need to arrange only two copies of the GST invoice bill:

  • An original copy for the service recipient and
  • A duplicate copy for the supplier for internal use.

For goods or services that are being exported, the invoice must clearly mention the words, "supply for export on payment of Unified tax" along with the name and address of the receiver, address of delivery and the name of the country of destination.

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 have a decrease or increase in the prices of goods or services supplied. It can also have a change in the CGST/SGST/IGST rates, previously applied to this bill. There are some extra particulars that should be present in a revised GST invoice: ‘Revised Invoice’ should be written wherever applicable on the bill and the nature of the document.

When is Issuing a Tax Invoice not Mandatory?

A supplier can avoid providing a GST invoice only under two conditions:

  • First, if the recipient in the transaction is unregistered and
  • Second, when the recipients express that they do not need such an invoice.

The supplier of goods or services must remember that in case of tax-exempted goods and services, a registered business needs to provide a bill of supply rather than a regular GST invoice. This also applies if the supplier in question is already carrying taxes under composition scheme.

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