Before getting to this lets make clear what tax invoice is? Tax invoice may be understood as the invoice issued by one registered vendor to another, during sales. The main purpose of issuing tax invoice is to avail input tax credit.
So now let’s understand what to issue? When to issue? How to issue? And Why to issue? About GST tax invoice:
What to issue?
So what will be included in tax invoices after GST is implemented? Tax invoice should have the following:-
- *Name, Address and GSTIN of the supplier; ®
- *A consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized 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 codeof 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 taxor 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 taxis payable on reverse charge basis; ® and
- *Signature or digital signature of the supplier or his authorized representative®
Provided that the Commissioner may, on the recommendations of the Council, by notification, specify –
(I) The number of digits of HSN code for goods or the Accounting Code for services, that a class of registered persons shall be required to mention, for such period as may be specified in the said notification, and
(II) The class of registered persons that would not be required to mention the HSN code for goods or the Accounting Code for services, for such period as may be specified in the said notification
Provided further that where an invoice is required to be issued under clause (f) of sub-section (3) of section 31, it shall bear the signature or digital signature of the recipient or his authorized representative:
Provided also that in case of export of goods or services, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT ON PAYMENT OF INTEGRATED TAX” or “SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, as the case may be, and shall, in lieu of the details specified in clause (e), contain the following details:
(i) Name and address of the recipient;
(ii) Address of delivery; and
(iii) Name of the country of destination;
Provided also that a registered person may not issue a tax invoice in accordance with the provisions of clause (b) of sub-section (3) of section 31 subject to the following conditions, namely:-
(i) The recipient is not a registered person; and
(ii) The recipient does not require such invoice, and shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.
Bill of supply
Tax invoice is generally issued to charge the tax and pass on the credit. In GST there are some instances where the service provider is not allowed to charge any tax and hence a Tax invoice can’t be issued instead another document called Bill of Supply is issued. It consist of all the points that are marked with * in front of them in tax invoice points.
Receipt voucher contains all the points in tax invoice that have the mark ® after them. It also contain “amount of advance taken” which is not included in tax invoice.
Provided that where at the time of receipt of advance,
- The rate of tax is not determinable, the tax shall be paid at the rate of eighteen per cent.;
- The nature of supply is not determinable; the same shall be treated as inter-State supply.
When to issue?
When to issue the invoice is different for goods and services.
1. Every Registered Taxable person who Supplies Taxable Goods shall issue a tax Invoice, Before/at the time of:
a. Removal of Goods, if supply involves movement of goods
b. Delivery of Goods/making available to recipient, if supply doesn’t involves movement of goods
c. Issuance of successive statements accounts, if supply is a continuous supply of goods
d. When recipient approves or 6 months from the date of removal, if supplied is on approval basis.
2. Every Registered Taxable person who Supplies Taxable Services shall issue a tax Invoice
a. Within 30 days from date of supply, in normal cases
b. Within 30 days from the due date of payment, in case of continuous supply of services where due date ascertainable
c. Within 30 days from the date of payment, in case of continuous supply of services where due date is not ascertainable
d. At the time of cessation, in case of Continuous supply of services where contract ceases If supplier is a bank or any financial institution, then within 45 days from the supply of service.
How to issue?
Now we know what to issue and when it should be issued but question still remain that how this invoice should be issued
1. The invoice shall be prepared in triplicate, in case of supply of goods, in the following manner:–
(a) The original copy being marked as ORIGINAL FOR RECIPIENT;
(b) The duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
(c) The triplicate copy being marked as TRIPLICATE FOR SUPPLIER.
2. The invoice shall be prepared in duplicate, in case of supply of services, in the following manner:-
(a) The original copy being marked as ORIGINAL FOR RECEIPIENT; and
(b) The duplicate copy being marked as DUPLICATE FOR SUPPLIER.
3. The serial number of invoices issued during a tax period shall be furnished electronically through the Common Portal in FORM GSTR 1.
Why to issue tax invoice?
Invoice is important for the determination of GST liability of taxpayers particularly is important for following purposes, ITC cannot be claimed on the tax paid on goods and services or both due to an order for the demand raised due to any fraud, wilful misstatement or suppression of facts,Tax invoice is used for determination of address of delivery, determination of continuous journey of goods or services, input services distributor’s mechanism, determination of time of supply of goods and services, for determination of Value of goods or services; For taking input tax credit and Assessment and other proceedings.