TAX INVOICE UNDER GST

Tax Invoice under GST

What is Invoice:

An invoice is a commercial instrument issued by a seller to a buyer. It identifies both the trading parties and lists, describes, and quantifies the items sold, shows the date of shipment and mode of transport, prices and discounts, if any, and delivery and payment terms. In certain cases, (especially when it is signed by the seller or seller’s agent), an invoice serves as a demand for payment and becomes a document of title when paid in full. Types of invoice include commercial invoice, consular invoice, customs invoice, and proforma invoice. It is also called a bill of sale or contract of sale.

Tax Invoice under GST:

Under the GST regime, an “invoice” or “tax invoice” means the tax invoice referred to in section 31 of the CGST Act, 2017. This section mandates issuance of invoice or a bill of supply for every supply of goods or services. It is not necessary that only a person supplying goods or services need to issue invoice. The GST law mandates that any registered person buying goods or services from an unregistered person needs to issue a payment voucher as well as a tax invoice. The type of invoice to be issued depends upon the category of registered person making the supply.

For example, if a registered person is making or receiving supplies (from unregistered persons), then a tax invoice needs to be issued by such registered person. However, if a registered person is dealing only in exempted supplies or is availing of composition scheme (composition dealer), then such a registered person needs to issue a bill of supply in lieu of invoice.

The invoice should contain description, quantity and value & such other prescribed particulars (in case of supply of goods) and the description and value & such other prescribed particulars (in case of supply of services). An invoice or a bill of supply need not be issued if the value of the supply is less than Rs. 200/- subject to specified conditions.

Under GST a tax invoice is an important document. It not only evidences supply of goods or services, but is also an essential document for the recipient to avail Input Tax Credit (ITC). A registered person cannot avail input tax credit unless he is in possession of a tax invoice or a debit note.

GST is chargeable at the time of supply. Invoice is an important indicator of the time of supply. Broadly speaking, the time of supply of goods or services is the date of issuance of invoice or receipt of payment whichever is earlier.

Issue of Tax Invoice in case of supply of goods:

A registered person supplying taxable goods shall, before or at the time of removal of goods (where supply involves movement of goods) or delivery or making available thereof to the recipient, issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars has been prescribed in the Invoice Rules.

Issue of Tax Invoice in case of supply of services:

A registered person supplying taxable services shall, before or after the provision of service but within 30 days from the date of the supply of service, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as has been prescribed in the Invoice Rules.

Contents of Tax Invoice:

There is no format prescribed for an invoice, however, Invoice rules makes it mandatory for an invoice to have following fields (only applicable field are to be filled):

  • name, address and GSTIN of the supplier;

  • a consecutive serial number, in one or multiple series, containing alphabets 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;

  • name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered and where the value of taxable supply is fifty thousand rupees 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; and

  • signature or digital signature of the supplier or his authorized representative.

Specimen Tax Invoice:

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