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Basics of Invoicing Under GST – Goods And Service Tax

Basics of Invoicing Under GST – Goods And Service Tax

Basics of Invoicing Under GST

Basics of Invoicing Under GST : Goods and Services Tax (GST) is an indirect tax applicable throughout India which replaced multiple cascading taxes levied by the central and state governments. It was introduced as The Constitution (One Hundred and First Amendment) Act 2017,  following the passage of Constitution 122nd Amendment Bill.

The GST is governed by a GST Council and its Chairman is the Finance Minister of India. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% and 18%. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold. In addition a cess of 15% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products.

Touted by the government to be India’s biggest tax reform in 70 years of independence, the Goods and Services Tax (GST) was finally launched on the midnight of 30 June 2017, though the process of forming the legislation took 17 years (since 2000 when it was first proposed).

The launch was marked by a historic midnight (30 June – 1 July 2017) session of both the houses of parliament convened at the Central Hall of the Parliament, but which was immediately boycotted by the opposition by staging a walk out to show their disapproval of the same.

Basics of Invoicing Under GST

Invoicing forms a crucial function when it comes to the execution of a transaction. The invoice becomes a basic document for recording the sale/purchase in books of accounts.

The government has notified rules of invoicing under GST along with a template of invoice covering the elements such as supplier’s details, GST tax rates etc that need to be presented. Let us understand these in detail.

Basics of Invoicing Under GST

In the current tax regime, two types of invoices are issued:

Types of Invoices under Current Tax Regime

This invoice is issued to registered dealers. It includes particulars of the product, details about the supplier (TIN) & the recipient along with tax charged. A registered purchaser can use this to claim tax credit called as input tax credit.

a.  Excise Invoice(as per Rule 11 of Central Exercise)

The excise invoice is signed by the owner of the factory (where it is manufactured) or his authorized agent. This invoice is issued to highlight all the particulars of goods along with details of duty paid to let the recipient know how much tax has been charged and how much CENVAT input he can claim on the purchase of the goods.

b. Vat Invoice

The VAT invoice is issued by registered VAT dealers in the manner as prescribed by the State Vat laws of the respective state of the supplier. Eg. for a dealer doing business in Maharashtra, he will be required to quote his VAT TIN no.(Tax Identification Number under MVAT)/ CST no.

2. Retail or commercial invoice

This is issued to an unregistered dealer or retail customer. The VAT charged in the bill is shown separately but as it is issued to the ultimate consumer who has the final liability to pay the tax, tax credit is not to be passed on and hence tax credit can’t be claimed on this invoice.

Basics of Invoicing Under GST

In the GST regime, two types of invoices will be issued:

 1. Tax invoice

2. Bill of supply

1. Tax Invoice

When a registered taxable person supplies taxable goods or services, a tax invoice is issued. Based on the rules regarding details required in a tax invoice, a sample tax invoice has been shown:
Basics of Invoicing Under GST

2. 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 supplier 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.

Cases where a registered supplier needs to issue bill of supply:

  • Supply of exempted goods or services
  • Supplier is paying tax under composition scheme

Basics of Invoicing Under GST

Number of copies of Tax Invoices are to be issued are : 

When goods are supplied, the supplier is required to issue three copies of the invoice– Original, Duplicate, and Triplicate.Basics of Invoicing Under GST

Original invoice: When a buyer makes the purchase he gets the first copy of invoice, marked as ‘Original for recipient’.

Duplicate copy:  The duplicate copy is issued to the transporter( carrier of goods) to present as evidence as and when required, and is marked as ‘Duplicate for transporter’. The transporter doesn’t need to carry the invoice if the supplier has obtained an invoice reference number.

Triplicate copy: This copy is retained by the supplier for his own record.

Under GST invoicing rules and formats have been notified covering details such as supplier’s name, shipping and billing address, HSN Code, place of supply, rate. In this article we will be covering all aspects of invoicing under GST.

Basics of Invoicing Under GST

Time limit to for invoicing under GST : 

The GST Model law has defined the time limit for issue of GST tax invoices, revised bills, debit notes and credit note.

Following are the due dates for issuing an invoice to customers:

  • Supply of Goods (Normal case)- On or before date of removal/ delivery
  • Supply of Goods (Continuous Supply)- On or before date of issue of account statement/ payment
  • Supply of Services (General case)- within 30 days of supply of services
  • Supply of Services (Banks & NBFCs)- within 45 days of supply of services

Basics of Invoicing Under GST

Revise Already Issued Invoices under pre-GST regime

Revised tax invoices can be issued by a registered taxable person within one month from issuance of certificate of registration i.e. GST Registration. It will be issued against the invoice already issued during the period starting from the effective date of registration till the date of issuance of certificate of registration to him

Basics of Invoicing Under GST

The 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 supplier 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.

Where the value of invoice is less than Rs 200 and the recipient is an unregistered, registered taxpayer, he or she can issue an aggregate invoice for such multiple invoices on a daily basis.

For example, you may have issued 3 invoices in a day of Rs.80, Rs.90 and Rs.120. In such a case you can issue a single invoice, totaling to Rs.290, to be called an aggregate invoice.

Debit note issue details

Debit note is to be issued by supplier:

  1. Original tax invoice has been issued and taxable value in the invoice exceeds actual taxable value.
  2. Original tax invoice has been issued and tax charged in the invoice exceeds actual tax to be paid.

Credit note issue details

Credit note is to be issued by supplier:

  1. Original tax invoice has been issued and taxable value in the invoice exceeds actual taxable value.
  2. Original tax invoice has been issued and tax charged in the invoice exceeds actual tax to be paid.
  3. Recipient refunds the goods to the supplier
  4. Services are found to be deficient

Basics of Invoicing Under GST

The specific mandatory fields in an GST compliant invoice are

To issue and receive a GST compliant invoice is a prerequisite to claim ITC. If a taxpayer does not issue such invoice his customer loses ITC claim and the taxpayer loses its customers. Here we mention the mandatory fields in an invoice:

  1. Invoice number and date
  2. Customer name
  3. Shipping and billing address
  4. Customer and taxpayer’s GSTIN
  5. Place of supply
  6. HSN code
  7. Taxable value and discounts
  8. Rate and amount of taxes i.e. CGST/ SGST/ IGST
  9. Item details i.e. description, unit price, quantity

Various types of invoices or supporting documents Details:

All different types of GST compliant invoices such as:

  • sales invoices
  • purchase invoices
  • bill of supply
  • credit notes
  • debit notes
  • advance receipts
  • refund vouchers
  • delivery challans (for supply on approval, supply of liquid gas, job work and other).

Basics of Invoicing Under GST

  • Difference between invoice date and due date:

Invoice date refers to the date when the invoice is created on the bill book, while the due date is when the payment is due against the invoice.

  • Issueing an invoice under reverse charge

Here, you not issue an invoice different from usual sales or purchase invoices. The only additional requirement is that you need to mention on the invoice that tax is paid on reverse charge.

  • Mandatory to maintain invoice serial number:

Yes, invoice serial number must be maintained strictly.

For example, if invoice is being issued with serial number as INV001, the same format must be maintained. You may change the format by providing a written intimating the GST department officer along with reasons for the same

  • All details are required to be mentioned in GSTR-1 for documents issued:

For the following nature of documents issued number of documents prepared, cancelled and net issued along with serial number of each must be mentioned:

  1. Invoices for outward supply
  2. Invoices for inward supply from unregistered person
  3. Revised Invoice
  4. Debit Note
  5. Credit Note
  6. Receipt voucher
  7. Payment Voucher
  8. Refund voucher
  9. Delivery Challan for job work
  10. Delivery Challan for supply on approval
  11. Delivery Challan in case of liquid gas
  12. Delivery Challan in cases other than by way
  • Can I sign my invoice through DSC?

Yes, you may digitally sign your at our software through DSC and authentic your invoice. In case you do not have a DSC, we also provide an option to sign through Aadhaar number.

Check here to know more on GST and to download GST Billing Rules :

SL NO. TOPICSLINK
1.Invoicing Under GST CHECK HERE
2.Invoicing Under GST RulesCHECK HERE

For more on GST log onto www.cakart.in

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