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GST Invoice: All About GST Invoice - Format, Rules and Time Limit
An invoice is an evidence of sale transactions between seller and the buyer. But not every individual feels the importance of the invoice and at times prefers not to receive an invoice for the product purchased by him. Simply because, with invoice, he will have to pay the tax, as applicable on such product or service. An invoice is more than just a proof of sale transaction; it is also a medium of contribution to the wealth building of a Nation at large. It is because a valid invoice will include the applicable indirect taxes and thereby making the involvement of one and all in the development of Nation.
The introduction of Goods and Service Tax (GST) in India, establishes uniformity in the collection mechanism of indirect taxes from the general public. Following the implementation of GST, the invoices must be issued in accordance with the GST provisions and regulations, also known as ‘the GST Invoice’. This article aims to help readers understand the GST invoice and the provisions governing it.
Contents :-
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What is GST Invoice?
GST invoice or Tax Invoice or Bill is a document that is issued by the supplier of the goods or services to the customer. It encapsulates the details of the supply of goods and services along with the information of units and rate of goods or services sold. Moreover, the GST invoice is a documentary evidence of transactions entered into between the seller and the buyer.
Contents of GST Invoice
There is no specific format for a GST invoice. However, GST invoice Rules specify the minimum information that must be included on any GST invoice. As a result, a standard GST invoice format must include the following information:
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Name and address of the supplier of goods or services.
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Date of supply and place of supply.
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GST registration number of the supplier of goods or services.
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Invoice Number.
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If the recipient is registered, name and address along with the GST number of the recipient should be included.
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Details of goods supplied along with the HSN information. Also, the rate per unit and the quantity of goods supplied are to be specified.
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Details of services supplied along with SAC information. Also, the hourly rate along with the basis of charges are to be specified.
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Value of goods or service supplied.
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Discount details.
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Clarification if GST would be levied under Reverse Charge Mechanism.
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Applicable rate of GST.
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Total Invoice Value in number and in words.
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Details of Payment and Credit terms.
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Sign and seal of the supplier.
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Terms & Conditions should be specified, if any.
HSN/SAC Code under GST
The Harmonized System of Nomenclature (HSN) code is developed by the World Customs Organization (WCO). It is a unique eight digit code issued with the intent to classify the goods uniformly across the world.
A Service Accounting Code (SAC) is issued by the Central Board of Indirect Taxes and Customs (Service Tax Department) for classifying various types of services. It is a unique six digit code issued with the intent to bring uniformity in the classification of services.
Below table shows the mandatory requirements for using the HSN/SAC code on GST invoices when making supplies of goods and services:
Aggregate Annual Turnover in the Preceding Financial Year | Mandatory Number of Digits of HSN/SAC code on GST Invoice |
|---|---|
Import-Export Dealer (irrespective of the turnover limit) | Eight Digits HSN code |
Above INR 5 Crore | Six Digits |
Up to INR 5 Crore | Four Digits |
Note: In the case of transactions between business to business (B2B), a GST invoice must be issued with a valid HSN or SAC code, as the case may be. However, in the case of transactions between Business to Consumer (B2C), a GST invoice may not include an HSN or SAC code.
Sample of GST Invoice
The samples of GST invoice in case of supply of goods and supply of services is presented below:
In case of Supply of Goods
Anchor 1
In case of Supply of Services
Time Limit for Issuance of GST Invoice
The time limits for issuing GST invoice under different instances are explained below:
In case of Supply of Goods
Instances | Issue of GST Invoice |
|---|---|
When supply of goods involves movement: | GST invoice should be issued before or at the time of removal of such goods. |
When there is no movement of goods: | GST invoice should be issued at the time of delivery or at the time of making them available to the recipient. |
When goods are issued on sale on approval basis: | GST invoice should be issued at the earliest of the following events:
Before the time of supply OR
At the time of supply OR
Six months from the date of removal |
In case of continuous supply of goods: | GST invoice should be issued before or at the time of each successive:
Issuance of statements of accounts OR
Receipt of payment |
incase of supply of services 2
In case of Supply of Services
Instances | Issue of GST Invoice |
|---|---|
All types of supply of services except supplier of banking and insurance services: | GST invoice should be issued within 30 days from the date of supply of service. |
In case of supply of banking or insurance services: | GST invoice should be issued within 45 days from the date of supply of service. |
In case of continuous supply of services if: | GST invoice should be issued: |
The due date of payment is known at the time of service contract: | On or before the due date of supply of services |
The due date of payment is not known at the time of service contract: | Before or at the time of receipt of payment. |
The payment is linked with the completion of an event: | On or before the completion of the event linked with the payment. |
Manner of issuing GST Invoice
In case of supply of goods, the GST invoice should be issued in triplicate in the following manner:
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Original Invoice for the Recipient by being marked as a ‘Original’.
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Duplicate Invoice for the Transporter by being marked as a ‘Duplicate’.
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Triplicate Invoice for the Supplier by being marked as a ‘Triplicate’.
In case of supply of services, the GST invoice should be issued in duplicate in the following manner:
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Original Invoice for the Recipient by being marked as a ‘Original’.
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Duplicate Invoice for the Supplier by being marked as a ‘Duplicate’.
Significance of GST Invoice
GST invoice is an important document as it forms the basis of evidence of time and place of supply. Following are the importance of GST invoice:
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GST invoice is an essential document as it enables the recipient to claim the Input Tax Credit (ITC). Without a valid GST invoice, a registered person cannot claim ITC.
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GST is chargeable at the time when supply takes place. Therefore, a GST invoice acts as a determining factor for the time of supply.
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Moreover, the place of supply can also be determined using the GST invoice.
Revised Invoice: In case of Sale of Goods between the Date of Application for GST Registration and the Date of Grant of Registration
Every registered person under GST has to issue a GST invoice at the time of affecting the supply under GST. But what about the supplies affected between the date of application for GST registration and the date of grant of registration? The question arises whether the person who has made an application for registration will issue a regular invoice or a GST invoice? If the supplies are taxable under GST, issuance of a GST invoice will then only enable the recipient to claim the Input Tax Credit (ITC) on such purchases. How the supplies during this time period will be affected and brought under the tax net of GST?
For these purposes, the concept of ‘Revised Invoice’ is introduced. A revised invoice must be issued by the supplier for the supplies made during the intervening period of date of application for registration and the date of grant of registration. Moreover, the revised invoice must be issued within a period of one month from the date of receipt of GST registration certificate. This allows the recipient to claim ITC for the GST paid at the time of purchase.
Other Supply-Related Documents
Aggregate Invoice
When taking loans from banks, GST is levied on the processing charges and other charges (loan prepayment charges) excluding the principal and interest payment.
Debit Note
Where a previously issued GST invoice is issued at a lower value and the tax amount is also low, the rectification of such a mistake is done through the issue of Debit Note.
Credit Note
Where a previously issued GST invoice is issued at a higher value and the tax amount is also high, the rectification of such a mistake is done through the issue of Credit Note.
Bill of Supply
A Bill of Supply is issued by a registered person generally indulged into the selling of exempted goods. Usually Composition dealers and registered persons selling exempted goods, issues bill of supply instead of issuing a GST invoice. In a Bill of Supply, no details pertaining to GST are required to be shown.
Receipt Voucher
When an advance payment is received by the supplier of goods or services for the goods or services to be supplied in the future agreed date, a receipt voucher should be issued.
Payment Voucher
A payment voucher is issued by the recipient to the unregistered supplier. This is applicable in cases where the recipient is liable to pay GST under the Reverse Charge Mechanism (RCM).
Refund Voucher
When the supplier does not deliver the goods or supply the services against the advance payment received by him earlier, a refund voucher is issued.
Delivery Challan
When the supplier does not deliver the goods or supply the services against the advance payment received by him earlier, a refund voucher is issued.
Distinguish between GST Invoice, Debit Note, Credit Note
GST Invoice | Debit Note | Credit Note |
|---|---|---|
GST invoice helps the recipient to claim the Input Tax Credit (ITC). | The recipient of a debit note can claim Input Tax Credit (ITC) of goods or services. | The recipient of a credit note cannot claim Input Tax Credit (ITC) of goods or services. |
An original GST invoice reflects the exact value of tax payable on the taxable value of supply. | An issuance of a debit note increases the tax liability. | An issuance of a credit note decreases the tax liability. |
The GST invoice is the primary document that evidences the supply of goods or services between the seller and the buyer. | A debit note is issued if the value of supply or the tax charged on the value of supply in an original GST invoice is less than the actual value of supply or tax payable thereon. | On the other hand, a credit note is issued if the value of supply or the tax charged on the value of supply in an original GST invoice exceeds the actual value of supply or tax payable thereon. |
Transport
Transportation of Goods without GST Invoice
The movement of goods is not permissible unless it is accompanied by a GST invoice. However, there are certain exceptions to this. The following the instances whereby removal of goods is permissible without an invoice but with a delivery challan:
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Where goods are being transported to a job worker for job work.
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Supply of liquid gas of which the quantity is not known to the supplier at the time of removal from the place of supplier.
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Where goods are transported for reasons other than supply. Examples of reasons other than supply are: replacement under warranty, where recipient is not known, supply returns, supply for own use, and supply of goods on sale on approval basis.
Frequently asked questions
Q
What is the minimum value of taxable supply for issuing a GST Invoice?
A
The minimum taxable supply should be of INR 200 for issuing a GST invoice. When a supplier is supplying goods to an unregistered person of value less than INR 200, he is not required to issue a GST invoice.
Q
What is a revised invoice?
A
A revised invoice is issued for the supplies made during the transition period of application for registration and the date of grant of the registration. Revised invoices are to be issued within one month from the date of grant of the registration certificate.
Q
How to revise a GST invoice issued originally?
A
A GST invoice cannot be revised. However, if the taxable value of the supply of goods or services or the value of the tax amount changes, a credit note or debit note should be issued accordingly.
Q
If a supplier sells both taxable and exempted goods products to the same buyer, should he issue a tax invoice and bill of supply separately?
A
No. Only tax invoice should be issued by the supplier since both exempt and taxable supplies are made to the same person. The exempt supply should be declared in the same invoice.
Q
The ancillary expenses like packaging and transportation of goods should be included in the GST invoice?
A
Yes. All the expenses pertaining to packaging and transportation of a product should be a part of the GST invoice.
Q
If a person is liable to pay tax under Reverse Charge Mechanism? Who should raise the GST invoice in such a scenario?
A
In case of Reverse Charge Mechanism (RCM), a person should issue an invoice to oneself also called ‘self-invoice’. If a person is liable to pay GST under RCM, he should self-invoice. At the time of receipt of goods or services or both by the person liable to pay GST under RCM, he should issue an invoice at the time of such receipt. Moreover, at the time of making payment to the supplier, he should issue a payment voucher.
Q
What is Invoice-cum-Bill of Supply under GST?
A
When a registered person supplies both taxable and exempt goods or services or both to an unregistered person, he can issue a single document, that is, invoice-cum-bill of supply to the recipient.
Q
Explain the concept of Invoice matching under GST.
A
The invoice matching process matches all the taxable supplies purchased by the buyer and supplied by the seller. This enables a proper and accurate transfer of eligible Input Tax Credit (ITC) between the States.
Q
Explain the concept of Invoice matching under GST.
A
The invoice matching process matches all the taxable supplies purchased by the buyer and supplied by the seller. This enables a proper and accurate transfer of eligible Input Tax Credit (ITC) between the States.
Q
Explain the concept of goods sent on approval basis.
A
Under Sale on Approval basis, goods are sent to the recipient for consideration whether or not to buy the same within a specified period. If the goods are not returned by the buyer within a specified period, it will be treated as sales.
Q
What are the options for signing a GST invoice?
A
A GST invoice can be signed either digitally or physically. Moreover, a supplier or the authorized representative of the supplier may sign the GST invoice.
Q
Explain Invoice Number Rules under GST.
A
According to Advisory issued by the GST Department on GST invoice, following are the rules for Invoice Number of a GST Invoice:
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The GST invoice must have a consecutive or sequential number.
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The Invoice Number should be unique for each financial year.
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The Invoice Number must be a combination of alphabets, numbers, and special characters like hyphen, dash or slash.
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The Invoice Number must not exceed 16 characters in any case.
Q
Who is required to issue a Bill of Supply mandatorily under GST?
A
The following registered persons under GST are required to issue a Bill of Supply:
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Composition Dealers: A supplier registered under the Composition Scheme of GST cannot issue a GST invoice. However, the Composition Dealer must issue a Bill of Supply with the statement: “Composition taxable person not eligible to collect taxes on supplies”.
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Exporters: An export is a zero rated supply under GST. Meaning, no GST would be collected on export supplies. As a result, there is no requirement to issue a GST invoice for export supplies. However, an exporter must issue a Bill of Supply. The exporter must include the following statements on the Bill of Supply: "Supply meant for export on payment of Integrated GST" and "Supply meant for export under Bond or Letter of Undertaking without payment of Integrated GST", as the case may be.
Supplier of Exempted Goods: Exempted goods are not taxable under GST and hence a GST invoice is not required to be issued mandatorily for exempt sales. Instead, a Bill of Supply is required to be issued by the supplier of exempted goods compulsorily.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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