When you create invoices for your clients, specific details are needed to make them goods and services tax compliant. The seller’s and purchaser’s information, information about the products or services, as well as the details of the transaction are all required. Before you begin creating your own invoices, consider creating a list of all of the requirements.
Who Needs to Issue a GST Invoice?
All sellers registered under the GST are required to issue GST-compliant invoices, unless they are supplying goods that are exempt from the tax regime. In that case, you are allowed to issue a bill of supply instead. If you’re a composition dealer, you should issue both a GST-compliant invoice and a bill of supply.
When is a GST Invoice Needed?
A GST-compliant invoice should be issued any time you sell goods or supply a service. But you don’t need to issue a GST-compliant invoice if the sale is less than ?200 or the recipient isn’t registered under GST. There are some unexpected instances that require a GST invoice, including:
- When a supplier receives an advance payment from a customer, the supplier still needs to issue a GST invoice. If the transaction gets cancelled, a return voucher should be issued to cancel out the GST invoice.
- When a registered person receives supplies from an GST-unregistered person, the supplier must issue a GST invoice.
- When you transfer supplies to a branch located in a different state, because that branch has a separate GSTIN.
Which Type of GST Should You Charge?
It’s also important to understand whether you should charge SGST and CGST or IGST in your invoice. A good rule of thum is to charge SGST and CGST for all intrastate sales and charge IGST for interstate sales.
What’s Included on a GST Invoice?
All GST-compliant invoices should include:
- Name, address, and GSTIN of the supplier (your company)
- Invoice number that’s unique to the current year, consecutive in order, and comprised of only letters and numbers
- Name, address, and GSTIN of the recipient if the recipient is a business that is registered for GST
- Address used for delivery if applicable, you should also include the state code
- A brief description of the goods or services being provided by your company
- Total value of the goods or services included in the transaction
- Quantity of the goods or services included in the transaction
- HSN/SAC codes for all of the products or services provided
- Taxable value of the goods if applicable this number should include any discounts given
- Tax rate this should be the tax percentage under IGST, SGST, or CGST
- Exact amount of tax charged
- Place of supply your address including the state if you’re supplying goods or services via commerce or interstate trade
- If the place of delivery is different than the place of supply, it should be listed too
- Reverse tax, if it applies to the transaction
Creating GST invoices isn’t difficult, as long as you know exactly what you need to include. You can make the process easier by using GST-compliant cloud-hosted accounting software, such as QuickBooks Online.