From 1st July, 2017, GST has replaced most of the indirect taxes in india. There is slight difference between invoicing under GST and invoicing under old regime. Governement has notified rules for GST invoice and sample GST invoice format. Let’s understand this new era of GST in India.
Invoicing under GST:
Invoicing under Old regime:
There were two types of invoices in old regime. Tax invoice and Retail invoice.
Tax invoice has been issued to give input tax credit for tax paid. It was issued to registered person having tax number.
The retail invoice was required to issue to unregistred dealer and consumer who consumes final product. Obviously, there is no input credit available with this invoice.
Type of Invoicing under GST:
Unlike old regime, there is no need to confuse yourself with tax and retail invoice. You can issue tax invoice to registered and unregistered person. We can call this biggest change in the maintenance of invoices. However, be careful as you need to show separate details for tax invoices issued to registered person and the unregistered person in GST returns. So I recommend maintain separate books for invoice issued to registered persons and unregistered persons.
A registered person is required to issue tax invoice to every buyer while selling taxable goods or providing taxable service. We will talk about exact timing to issue tax invoice later in this article.
Details to be included in tax invoice:
- Name, GSTIN and address of supplier
- Serial number with consecutive series. “-“ or “/” can be used but no other special characters should be used. Serial number can have one or multiple series with alphabets or numerals.
- Date of issue of invoice.
- Name and address of recipient. GSTIN or UIN if recipient is registered person.
- When recipient is un-registered person and value of taxable supply is Rs. 50000 or more, you are required to narrate name, address of recipient with address of delivery, name of state and state code. You are not required to get and mention these details if supply is less than Rs.50,000. However, it is always advisable to narrate name, address and state in invoice for accounting purpose.
- HSN code of goods or Accounting code of services. ( SAC). However, this requirement is not compulsory for all sellers. We ll talk about this later in this article.
- Description of goods/ services.
- Quantity of goods and Unique Quantity code ( UQC).
- Total value of supply of goods or services or both.
- Taxable value of supply
- Rate of tax- CGST, IGST, Cess, SGST.
- Amount of tax
- Place of supply with name of state for interstate transaction
- Delivery address
- Whether tax is payable on reverse charge basis
- Signature or digital signature of the supplier or authorised representative.
Right time to issue tax invoice:
- A registered person supplying taxable goods shall issue tax invoice before or at the time of removal of goods ( when movement of goods involved) or delivery of goods ( in any other case).
- A registered person supplying taxable services shall issue tax invoice before or after provision of services but within 30 days from the date of supply of service.
Bill of Supply:
There is new concept of bill of supply in GST regime. When person has opted in composition scheme or when person who is supplying exempted goods such as food items or kitchen items or services or both is required to issue bill of supply. Tax credit can’t be claimed by the recipient via bill of supply.
Exemption from bill of supply:
If registered person is supplying goods or services having less than Rs.200 value, it is optional to issue bill of supply. He may choose not to issue bill of supply for these small bills.
Details to be included in bill of supply.
Please refer point 1,2,3,4,6,7,9, 16 of details to be included in tax invoice.
Invoicing under reverse charge:
When a person is required to pay tax on reverse charge basis, he is required to prepare tax invoice or bill of supply. He needs to show the details in GST return about this transaction.
When registered person receives any advance from the buyer, he needs to issue receipt voucher evidencing receipt of such payment.
Receipt voucher should contain following details:
Please refer 1,2,3,4,7,15,16,11,12,13,15 along with amount of advance taken.
Suppose in above case, after issuing receipt voucher for advance, no supply is made, then the registered person is required to issue payment/ refund voucher.
When a person receives supplies from the unregistered person and required to pay tax on reverse charge basis, he needs to issue payment voucher while making payment.
Format of GST invoices:
Government has notified sample format for GST invoice. You can view it here.
You can view and download sample format of GST invoice, bill of supply, credit note, debit note, payment voucher, receipt voucher in word file from this link.
Should you mention HSN / SAC code:
Many Assessee are worried for use of HSN / SAC code in invoice. Please remember that HSN code/ SAC code are mandatory for following assessee under GST:
- Having turnover of Rs. 5 crore and above – 4 digit HSN codes are required
- Having turnover between Rs. 1.5 Crore to Rs. 5 crore – 2 digit HSN codes are required
- Having turnover below Rs. 1.5 Crore- No need to mention HSN / SAC code in invoice.
You can find HSN/SAC code on this link.
Revised tax invoice:
GST has put a limit on the issue of revised tax invoice. The taxable person may issue revised tax invoice within 1 month from the date of registration. He can cover transactions from the effective date of registration till the date of issue of the registration certificate.
He can also issue consolidated revised tax invoice in respect of all supplies to an unregistered person.
When and how to issue Debit note and Credit note:
Credit note should be issued by a seller to the buyer in case of goods return or reduction in value of goods/supplies or both or discount claims. The details of credit note should be declared in the tax return to reduce tax liability. The time limit to declare about credit note is by September following the end of the financial year or the date of filing annual return whichever is earlier.
When seller found 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 return of the month during such debit note has been issued.
The manner of issue of invoices:
Invoices should be issued and maintained in the following manner in case of supply of goods:
- Original to Recipient
- Duplicate to Transport
- Triplicate to Supplier ( For his record).
Invoices should be issued in the following manner in case of supply of services:
- Original to Recipient
- Duplicate to the supplier ( For his record).
Invoicing for the continuous supply of goods:
If you are in a business where there is a continuous supply of goods like construction and you are issuing successive statements or receiving successive payments, you are required to issue an invoice before or at the time of issuance of statements of accounts or receipt of the payment- whichever is earlier.
Invoicing while doing an export of goods or services or both:
Tax invoice for input service distributor ( ISD):
Input service distributor should issue tax invoice while distributing credit. Following details are required to be mentioned in invoice:
- Point – 1,2,3,4 mentioned for tax invoice
- The amount of credit distributed.
- Signature of authorised person.
Gst introduced a new concept of the electronic bill named E-way bill. E-way bill is required in case of supply of goods exceeding Rs. 50,000.
E-way bill can be generated through GST portal. Please note that registered and unregistered person can generate e-way bill but compliance part will be mandatory for GST Registered person. We will cover more about e-way bill in next article.
I hope this article helps you to understand invoicing under GST. Share this article on social media to motivate me to write more.