You might have seen the GST invoice whenever you buy any goods or services, whether it be online or offline.
If any business is registered under the GST regime, then they must issue such GST tax invoices on the sale of any goods or services.
Let us now understand various aspects of GST invoicing under the GST regime.
Table Of Content
- What Is GST Invoice?
- Types Of Invoice
- When To Issue GST Invoice?
- Criteria & Procedure To Issue GST Invoice
- Importance Of GST Invoice
- Frequently Asked Questions
What Is GST Invoice?
A GST invoice is issued by the supplier of any goods or services to the recipient or buyer of such products or services.
When any goods or service covered under the GST is being supplied, then the supplier has to issue a bill or invoice to the recipient. This bill is known as the invoice.
The main point of issuing such an invoice is to ask the buyer for the payment of receiving such goods or services.
All the suppliers have to issue a tax invoice under GST mandatorily whenever any supply of products or services takes place.
Types Of Invoice
Now let us understand what are the different types of GST invoices which a supplier can issue.
1. GST Tax Invoice
A tax invoice is the most common form invoice which is issued in the GST regime. A tax invoice is issued when a supplier supplies any goods or services to the recipient.
The invoice has the details of both the parties, description of products or services being provided, the tax rate applicable, terms and date of supply, and the total amount due for payment.
2. Bill Of Supply
A bill of supply is an invoice that does include a tax amount in it but all the other things are the same as the regular tax invoice.
It is issued under two conditions –
- Any registered person is supplying any goods or services but it is exempted from any tax.
- Any person who is registered under the composition scheme can only issue a bill of supply since he cannot charge the GST tax from the recipient.
3. Receipt & Refund Voucher
A receipt voucher is to be issued by the supplier when advance payment is received for the supply of any goods or services. It is issued as proof of the advance payment received.
A refund voucher is issued when the supplier is not able to deliver the goods or services for which the advance payment has been made.
4. Payment Voucher In Reverse Charge
A payment voucher is issued when the supply of goods or services takes place under the reverse charge mechanism.
The recipient, who is registered under GST has to issue a payment voucher to the supplier for the amount of goods or services being supplied.
In this case, since the supplier is not registered under GST, so the recipient is only liable to pay taxes on the supply being made.
5. Credit & Debit Note
A credit or debit note is issued by the supplied when the value of the invoice either increases or decreases.
A debit note is issued by the supplier whenever there is an increase in the invoice value. This can happen when there is an increase in the tax rate or the taxable value.
A credit note is issued by the supplier whenever there is a decrease in the invoice value. This can happen when there is a decrease in the tax rate or the taxable value or the recipient returns the goods or services received.
6. Aggregate Invoice
If a registered supplier makes a supply to an unregistered buyer and the value of the invoice is less than Rs.200, then the supplier can issue an aggregate invoice for the total number of transactions done in an entire day.
7. Delivery Challan
A delivery challan is issued whenever the goods are being transported from one place to another, irrespective of whether a sale is made or not. It is mainly for transporter.
When To Issue GST Invoice?
A GST invoice is to be issued under the following conditions-
- If the supplier has received the payment for the supply of goods or services.
- The supplier has made the supply of goods or services, but the payment is still awaited.
The supplier is liable to pay taxes whenever an invoice is issued irrespective of whether the payment has been made or not by the recipient.
Criteria & Procedure To Issue GST Invoice
There are specific rules under GST to issue a GST invoice. It is issued either in duplicate or triplicate manner.
In the case of the supply of goods, three copies of the invoice are generated, i.e. the original one for the recipient, the duplicate for the transporter, and the triplicate for the supplier.
In case of the supply of services, two copies of the invoice are generated, i.e. the original for the recipient and the duplicate for the supplier.
A GST invoice format has some particular mandatory field which is to be mentioned on all the invoices. For example, below is a list of such mandatory fields as per the GST invoice rules –
- Supplier’s name, address, and GST number
- Invoice date and a unique invoice number
- Recipient’s name, address, and GST number, if registered
- Billing and shipping address, if different
- Place of supply
- HSN or SAC codes
- Description of goods or services supplied
- Quantity of products or services supplied
- Taxable value, applicable tax rate and discount (if any)
- Reverse charge applicable or not
- Supplier’s signature
All invoices must be issued at the time of or before the delivery, in case of goods, and within 30 days in case of services.
Download – Excel Format
Importance Of GST Invoice
Issuing of GST invoices is extremely important for any business for the following reasons –
- An invoice is a proof that the supplier has supplied the goods or services to the recipient and it can be used as proof to demand the payment of such supply made.
- An invoice is mandatory to claim ITC at the time of return filing on the GST portal.
- The recipient who wants to claim the taxes which are paid on the purchases must have a valid GST invoice from his supplier for all the goods or services received.
- Invoices help to analyze the business by generating sales and purchase reports.
If the taxpayer does not issue a tax invoice or issues a wrong invoice then it can lead to penalties or GST cancellation.
Frequently Asked Questions
Now let us discuss some frequently asked questions on GST invoicing.
A GST invoice can be issued in either excel format or in pdf format through any software or manually.
Duplicate or triplicate copies are issued depending upon whether goods or services are being supplied.
An invoice once issued can be cancelled only if it is not reported in GSTR-1 or GSTR-3B, no supply is made by the supplier against the invoice, and no payment has been made against the invoice.
If anyone of the condition is fulfilled, then the credit note is to be issued by the supplier instead of cancelling the invoice.
The invoice date is the date on which the invoice is created by the supplier. Due date is the date by which payment has to be done by the recipient.
If a registered seller purchases any goods or services from an unregistered seller, then he has to issue an invoice under reverse charge.
In this the tax payment is to be done by the registered seller on behalf of the unregistered seller. It is also known as a payment voucher.
An invoice is to be prepared whenever there is a supply of any goods or services.
An invoice can only be signed by the authorized signatory of the GST or any representative of the authorized signatory. A supplier can also digitally sign the invoice.
Yes, An invoice can be revised by issuing a credit or debit not depending upon the increase or decrease in the taxable value or the tax rate.
The invoices raised for foreign currency transactions will always be shown in Indian rupee in the accounts of the supplier, so it’s better to raise the invoices in Indian rupee only.
There is no restriction in raising the invoice in Indian rupee for foreign currency transactions.
In the case of the supply of goods, the invoices should be issued on the date or before the date of delivery.
In the case of the supply of services, invoices should be issued within 30 days of supply.
An invoice number is a unique number given to each invoice raised. These points must be taken care of while creating an invoice –
1. It should be consecutively numbered.
2. It should be unique for each financial year.
3. It should not be greater than 16 characters.
4. It can consist of alphabets, numbers, and special characters.