Under GST regime each supply of goods or services must accompany an invoice or a bill of supply.
Such a document issued reflects the (i) trading parties, (ii) description and quantity of goods and services, (iii) date of shipment, (iv) mode of transport, (v) prices and discount and (vi) delivery and payment terms.
However, it is not mandatory that only the supplier of goods or services needs to issue this document under GST.
In cases where a registered person buys goods or services from an unregistered person, such a buyer needs to issue a tax invoice as well as a payment voucher.
Therefore, it is important to understand the various GST invoice rules so that a registered person can prepare proper GST invoices under various circumstances.
GST Invoice Rules
I. Tax Invoice Format
As per section 31 of the CGST act, 2017 a registered person issuing a GST tax invoice needs to include the following particulars:
- Name, address and GSTIN of the supplier.
- A consecutive serial number not exceeding 16 characters, in one or multiple series, containing letters or numerals or special characters (hyphen or dash and slash symbolised as “-” and “/” respectively) and any combination thereof, unique for a financial year.
- Date of its issue.
- Name, address and GSTIN or UIN, if registered, of the recipient.
- Address and name of the recipient and the address of delivery, along with the name of state and its code, if such recipient is unregistered and where the value of taxable supply is Rs 50,000 or more.
- HSN Code of goods or Accounting Code of services.
- Description of goods or services.
- Quantity, in case of goods and unit or Unique Quantity Code thereof.
- Total value of supply of goods or services or both.
- Taxable value of supply of goods or services or both, taking into account discount or abatement, if any.
- Rate of tax (central tax, state tax, integrated tax, union territory tax or cess).
Amount of tax charged in respect of taxable goods or services (central tax, state tax, integrated tax, union territory tax or cess).
- Place of supply along with the name of state, in case of a supply in the course of inter-state trade or commerce.
- Address of delivery where the same is different from the place of supply.
- Whether the tax is payable on reverse charge basis.
- Signature or digital signature of the supplier or his authorized representative.
It is important to note that the GST Council via notification can prescribe:
- number of digits of the HSN code for various goods or services to be mentioned by different class of registered persons on the tax invoice
- category of registered persons who are not required to mention the HSN code for goods or services for particular period
(II) Tax Invoice Under RCM
As per section 31(3)(f) of the CGST act, 2017 a registered person who is liable to pay tax under reverse charge mechanism needs to issue an invoice in respect of goods or services received by him from the unregistered supplier.
This means that under RCM, the recipient of goods or services needs to issue a tax invoice since the supplier of goods or services in such a case is not registered under the GST regime. Furthermore, such an invoice needs to be issued on the date of receipt of goods or services.
In addition to this, under RCM, a registered person needs to issue a consolidated invoice at the end of the month. Provided the aggregate value of the supplies received exceeds Rs. 5,000 in a day from any or all of the suppliers.
(III) Invoice in Case of Exports
In case a registered person exports goods or services, he needs to issue an invoice that incorporates an endorsement claiming either
- ‘Supply meant for Export/Supply to SEZ Unit or SEZ Developer for authorized operations on payment of integrated tax’ or
- ‘Supply meant for Export/Supply to SEZ Unit or SEZ Developer for authorized operations under bond or LUT without payment of integrated tax’
Such an invoice should also mention:
- name and address of the recipient
- address of delivery
- name of the country of destination
(IV) When Not to Issue Invoice
As per section 31(3)(b) of the CGST act, 2017, a registered person shall not issue a tax invoice if the value of supplies is less than Rs. 200. However, this would not apply if the following two conditions are met:
- recipient is not a registered person
- recipient does not require such invoice
If the above two conditions exist, then a registered person needs to issue a consolidated tax invoice in respect of supplies at the close of each day.
(V) Invoice in Case of Unregistered Recipient
There are cases when a registered person supplies taxable as well as exempted goods or services to an unregistered recipient.
In such cases, the registered person needs to issue a single invoice cum bill of supply in case of such supplies made to an unregistered recipient as per rule 46(A) of the CGST rules, 2017.
(VI) When to Issue Tax Invoice?
In Case of Goods
In case a registered person makes a supply of taxable goods, he needs to issue invoice before or at the time of removal of goods in cases where supply involves movement of goods.
However, if a supply does not involve movement of goods, the registered supplier needs to issue a tax invoice at the time of delivery or when the goods are made available to the recipient.
In Case of Services
In case a registered person supplies taxable services to a recipient, he needs to issue tax invoice within a period of 30 days from the date of delivery of such services. However, where the supplier of services is:
- an insurer
- banking company
- financial institution/NBFC
he needs to issue tax invoice within a period of 45 days from the date of supply of such services.
Furthermore, if the above mentioned institutions make taxable supplies of services between distinct persons as per section 25(4) of the CGST act, then such an entity may issue tax invoice:
- either before or at the time such supplier records the supply in his books of accounts or
- before the expiry of quarter during which such supply of services was made
(VII) How to Issue Invoice?
In Case of Goods
In case a registered person supplies goods, he must issue invoice in triplicate in the following manner:
- Original copy for recipient marked as ‘Original for Recipient’
- Duplicate copy for transporter ‘Duplicate for Transporter’
- Triplicate copy for supplier marked as ‘Triplicate for Supplier’
In Case of Services
In case a registered person offers services, he must issue invoice in duplicate in the following manner:
- Original copy for recipient marked as ‘Original for Recipient’
- Duplicate copy for supplier marked as ‘Duplicate for Supplier’
Note: A registered person must note that he needs to electronically furnish the serial number of invoices issued during a tax period through the common portal in GSTR – 1.
(VIII) Bill of Supply
Bill of supply is a commercial document issued by a registered taxable persons supplying exempted goods or services under GST or paying tax under composition scheme as per section 10 of the CGST act, 2017. Such a document does not reflect any tax information since:
- composition dealers cannot collect taxes from the recipients
- suppliers making exempt supplies do not attract GST.
Hence, bill of supply does not contain any tax information. But it includes other components like:
- Name, address and GSTIN of both the supplier and recipient
- Invoice serial number
- Date of issue
- HSN/SAC code
- Description of goods or services
- Value of supply including discount
- Signature of the supplier
(IX) Receipt Vouchers
A registered person needs to issue a receipt voucher where he receives advance payment for making supply of goods or services. Such a document is an evidence that the advance payment has been received by the supplier from the recipient.
Apart from the basic details in tax invoice, the receipt voucher contains specific details such as amount of advance taken.
Furthermore, if it is not possible to determine tax at the time of receipt of advance then the registered person is liable to pay tax at the rate of 18%. Likewise, if it is not possible to determine the nature of supply at the time when advance is received, such a supply is treated as an inter-state supply.
(X) Refund Voucher
There are cases when a registered person receives advance payment for the supply of goods or services. As mentioned above, he is required to issue a a receipt voucher to the recipient.
But, the registered person makes no supply to the recipient after receiving the advance payment and thus does not issue any tax invoice either for the same.
In such a case, the registered person needs to issue a refund voucher to the person who made an advance payment to such a supplier.
Apart from the basic details in a tax invoice, a refund voucher would include specific details like number and date of receipt voucher, description of goods or services in respect of which refund is made and amount of refund made.
(XI) Payment Voucher
A registered person who is liable to pay tax under reverse charge mechanism needs to issue a payment voucher at the time of making payment to the supplier. Apart from the basic details of a tax invoice a payment voucher must include the amount paid, rate of tax and amount of tax payable in respect of taxable goods or services.
(XII) Revised Tax Invoice
As per section 31 of the CGST Act, 2017, tax invoice also includes any revised invoice issued by the supplier in respect of any supply made by him previously to the recipient.
Such an invoice must include the words ‘ Revised Invoice’ in the invoice and such words must be indicated prominently.
Besides this, the revised invoice must also include the serial number and date of the corresponding tax invoice or bill of supply against which such a revised invoice is issued. These details are in addition to the basic details that go into a tax invoice.
(i) Revised Invoice In Case Of Registration Prior to Issuance of Certificate
There can be cases where a registered person has been granted registration at a date prior to the issuance of certificate of registration to such a person.
In such a case, the registered person must issue revised tax invoice in respect of all the taxable supplies made during the period starting from effective date of registration to date of issuance of certificate of registration.
(ii) Revised Invoices In Case Of Recipient Not Registered Under GST
In addition to this, there can be cases where a registered person makes taxable supplies to a recipient who is not registered under the act during such period. In this case, the registered person needs to issue a consolidated tax invoice in respect of all such supplies made to the recipient.
(iii) Revised Invoice Where Value of Supply Does Not Exceed Rs 2.50 Lakhs
Also, there can be scenarios where value of supply does not exceed Rs. 2,50,000 in case of inter state supplies. In such cases, the registered person needs to separately issue consolidated revised invoice in respect of all the recipients located in a state who are not registered under the act.
(XIII) Debit Note and Credit Note
A. When To Issue Debit Note
A registered supplier is required to issue a debit note to the recipient in the event of any of the following cases:
- the supplier charges value of goods or services in the invoice that is less than the actual value of such goods or services
- supplier charges a lower rate of tax than what is applicable on goods or services supplied
- the quantity of goods or services received by the recipient is more than what has been declared in the original tax invoice
- any other reasons
B. When To Issue Credit Note
Likewise, a registered supplier is required to issue a credit note to the recipient in the event of any of the following cases:
- the supplier charges value of goods or services in the invoice that is more than the actual value of such goods or services
- supplier charges a higher rate of tax than what is applicable on goods or services supplied
- the quantity of goods or services received by the recipient is less than what has been declared in the original tax invoice
- quality of goods or services supplied to the recipient is not up to the mark. Thus, necessitating the supplier to reimburse partial or total amount of the invoice.
- any other reasons
C. Details on Debit and Credit Notes
Thus, Debit and credit note would include details like serial numbers and dates of the corresponding tax invoices or bills of supply against which such notes have been issued. This is in addition to the basic details mentioned in a tax invoice.
Furthermore, if an invoice or a debit note has been issued to pay tax as per section 74, 129 or 130, the registered person must include the words ‘Input Tax Credit not Admissible’ on such an invoice.
(XIV) Invoice in Case of Input Service Distributor
An ISD is an office of the supplier of goods or services that receives tax invoices for input services used by its branches. And such an office distributes tax credit on input services thus received by issuing a document to each of its branches. Thus, an ISD invoice or an ISD credit note issued by an ISD must include details like:
- Name, address and GSTIN of the ISD and its branches to whom credit is distributed
- Amount of credit distributed
- Basic details like serial number, date, signature etc.