GST Invoice Rules: The Fine Print
When studying the rules governing the issuing of invoices under the GST, be sure to understand the fine print. Here are some often overlooked aspects of GST invoicing, as specified by the CBEC under the Department of Revenue.
- All GST taxpayers are allowed to design their own invoice format.
- The GST law only requires certain fields to be mandatorily filled in the invoice.
- The time period mentioned for issuing an invoice is different for goods and for services. For goods, the timeline is before its delivery. For services, it is within 30 days from the date of the supply of services.
- Since the banking, insurance and passenger transport sectors have a huge number of transactions, tax payers are not required to incorporate the address of the customer and the serial number in their invoices.
- In situations where the goods are to be transported for delivery but the quantity to be supplied is not clear at the time of removal, the goods may be removed on the basis of a delivery challan and an invoice may be issued after delivery.
- There is no need to issue a separate Bill of Supply if the VAT invoice is issued for non-taxable supplies.
- Small retailers and other such small tax payers, who have a fairly large number of small transactions for up to a value of Rs200 per transaction to unregistered customers, are not required to issue an invoice for every such transactions. They are allowed to issue one consolidated invoice, at the end of each day, for all transactions done during the day. However, they should issue the invoice whenever the customer demands.
- Under normal circumstances, one copy of the invoice is required to be carried by the transporter. However, the GSTN (Goods and Services Tax Network) has a facility wherein one can acquire an invoice reference number. Once the tax payer has generated this number, his goods needn’t be accompanied by a paper invoice during transportation. This mechanism has been devised to handle frequent problems like paper invoices getting lost, misplaced or mutilated during the transportation of goods.
- To lower the compliance burden for small tax payers, the GST law allows tax payers with an annual turnover of up to Rs5 crores, to use the HSN (Harmonized System of Nomenclature) code of the goods, in their invoices.
Invoicing, under the reverse charge mechanism
A registered and taxable person who is liable to pay tax under a reverse charge, has to issue an invoice with respect to the goods/services received by him on the date of the receipt of goods/services from a person not registered under the act. The person is not required to issue a different invoice if the GST is payable under reverse charge but it must be clearly specified on the invoice that the tax is paid on reverse charge.