CA Ankita Mathur
Invoicing is a critical function for executing the process of any transaction. The invoice is a basic document used for recording the details of sales or purchase in the books of account.
The government has introduced new rules of invoicing, along with a template of the invoice, under the Goods &Services tax regime. This template covers important elements like GST tax rates, details of supplier, etcthat are required to be mentioned on the invoice.
Types of Tax Invoices under GST
There are two types of GST invoices, namely, a tax invoice and a bill of supply. Let us see what each invoice stands for and where it can be used.
Section 31 of the CGST Act requires that every registered supplier who is supplying either taxable goods or services or both,must issue a tax invoice to the customer, showing the description, quantity and value of goods, and the tax charged. The following rules describe the contents and use of invoice:
- Serial number: The serial number of the invoice needs to be consecutive and should not exceed 16 Itcan consist of numbers, letters, special characters or any combination thereby. The number should be unique for every financial year.
- Billing &shipping address: As this information will be required to determine place of supply and taxation of similar transactions, it is crucial to include this on the invoice.
- Unique GSTIN: A receiver requires a unique GST identification number. Different UN bodies, embassies and any other class of people have a specific code.
- Accounting Code/HSN Code: The person who is notified has to include an HSN code for the goods and an accounting code for the services that are supplied.
If the recipient is:
Registered:the name, address and GSTIN or Unique Identity Number will have to be mentioned.
Unregistered:name and address of recipient and the address of delivery, along with name of the state and its code,and value of the taxable supply if it is Rs 50,000 or more.
However, you are not required to issue a tax invoice if value of the goods or services provided is less than Rs 200.
Time Limit for Issuing Tax Invoice
If the supplier is a banking company, financial institution or NBFC, the invoice shall be issued within 45 days. In all other cases, it shall be issued within a period of 30 days.
Bill of Supply
A bill of supply is to be issued by a registered supplier when the goods or services being supplied are exempt from taxes, or when the supplier chooses to pay tax under the composition scheme. The rules governing bill of supply are as follows:
- Serial number:Like tax invoice, the serial number for bill of supply should be a consecutive number and consist of letters or numbers. It should be unique for every financial year.
- Details of receiver: Only if the receiver is registered, his name, address and unique GSTIN number is to be provided.
- Value of goods:The term ‘value’ should be used as opposed to ‘taxable value’.
However, bill of supply need not be issued if value of the goods or services provided is less than Rs 200.
Number of Invoice Copies
In case of supply of goods, three copies of theinvoice should be prepared. The original copy will be for recipient, a duplicate one for transporter, and a triplicate for supplier.
In case of supply of services, two copies of invoice should be prepared. The original invoice copy will be given to recipient, and a duplicate copy will be kept with supplier.
Revision of Value of Invoice
To revise the taxable value or the GST that has been charged on the invoice which is already issued, one can issue a debit note or a credit note.The debit note can be issued when GST charged on the invoice needs to be increased. Similarly, the credit note can be issued when GST charged on the invoice needs to be reduced.
Signing the Invoice
The invoice should include either a physical or digital signature of the registered person or that of an authorised representative of the registered person.
Furthermore to avoid penalties for non-compliance, all invoices should adhere to the rules that are framed under GST India.
CA Ankita Mathur (business services-H&R Block India Private Limited), author of this article, can be reached for assistance regarding GST compliant invoicing at [email protected].