TYPE OF INVOICES UNDER GST | Alignbooks

Generally speaking, an invoice is a document issued by a seller to a buyer containing the description of goods sold. It mentions description of both the parties i.e buyer & seller, details of items sold with quantity, shows the date of shipment and mode of transport, prices and discounts, if any, and the delivery and payment terms.

The invoice also serves as a demand for payment and becomes a document of title when paid in full. Types of invoices under GST regime include:

TAX INVOICE

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 the issuance of an 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 needs to issue an 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) or he is in receipt of such supplies where tax is payable on reverse charge basis, then a tax invoice needs to be issued by such registered person. The later consist of tax payable based on reverse charge basis and for purchases from unregistered dealer one has to raise invoice on oneself to claim Input Tax Credit (if permissible). So, such invoice raised on Reverse Charged Basis first create output tax liability payable on reverse charge basis by the recipient of goods and later on the output so paid could be claimed as ITC if not specifically denied on certain expenses like rent a cab, restaurant bill.

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.

Tax invoice is an important document as it evidences the 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.

There is no specific format has been prescribed for Tax Invoice however as mentioned in the respective rule for this purpose the Tax invoice must consist of following contents:

(a) Name, address and GSTIN of the supplier

(b) A consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters like hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year

(c) Date of its issue

(d) Name, address and GSTIN or UIN, if registered, of the recipient

(e) 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

(f) HSN code of goods or Accounting Code of Services

(g) Description of goods or services

(h) Quantity in case of goods and unit or Unique Quantity Code there of

(i) Total value of supply of goods or services or both

(j) Taxable value of supply of goods or services or both, taking into account the discount or abatement, if any

(k) Rate of tax (Central tax, State tax, Integrated tax, union territory tax or cess)

(l) Amount of tax charged in respect of taxable goods or services (Central tax, State tax, Integrated tax, union territory tax or cess)

(m) Place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce

(n) Address of delivery where the same is different from the place of supply

(o) Whether the tax is payable on reverse charge basis

(p) Signature or digital signature of the supplier or his authorized representative

In case of exports also the tax invoice needs to be raised, moreover if the permission for not charging of GST has not been obtained by the Exporter then he has to charge pay tax similarly in case of domestic supply and later on can claim the refund for tax so paid. However, if he has obtained the permission for not charging tax on furnishing of appropriate Bond/Letter of Undertaking then on raising of invoice the exporter should not charge tax on raising the export invoice.

In case of Interstate branch transfer also there is need for raising tax invoice under GST law.

BILL OF SUPPLY

However, if a registered person is dealing only in exempted supplies or is availing the composition scheme (composition dealer), then such a registered person needs to issue a bill of supply in lieu of invoice. In case of exempted goods, the trader need not charge any tax and similarly in case of composition scheme trader the trader would entitled to charge any tax, and the composition tax levy would be borne by the registered person from its own pocket.

A bill of supply shall be issued by the supplier containing the following details:

(a)  Name, address and GSTIN of the supplier

(b)  A consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters like hyphen or dash and slash symbolised as “-” and “/”respectively, and any combination thereof, unique for a financial year

(c)  Date of its issue

(d)  Name, address and GSTIN or UIN, if registered, of the recipient

(e)  HSN Code of goods or Accounting Code for Services

(f)  Description of goods or services or both

(g)  Value of supply of goods or services or both taking into account discount or abatement, if any

(h) Signature or digital signature of the supplier or his authorized representative

As far as the timing of issuing invoice is concerned, in case of goods, an invoice has to be issued before or at the time of supply. In case of services, however, an invoice has to be issued before or after the provision of services. If the invoice is issued after the provision of service, it has to be done within the specified period of 30 days from the date of supply of service, as per invoice rules.

Receipt Voucher/Refund voucher on receipt of advance payment

As prescribed in GST Law even the advance received against the future supply would also be subject to tax at time of such advance receipt. Accordingly, whenever a registered person receives an advance payment with respect to any supply of goods or services or both, he has to issue a receipt voucher or any other document, containing the following particulars prescribed under law:

(a)  Name, address and GSTIN of the supplier

(b) A consecutive serial number containing alphabets or numerals or special characters like hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year

(c)  Date of its issue

(d)  Name, address and GSTIN or UIN, if registered, of the recipient

(e)  Description of goods or services

(f)  Amount of advance taken

(g)  Rate of tax (Central tax, State tax, Integrated tax, Union territory tax or cess)

(h) Amount of tax charged in respect of taxable goods or services (Central tax, State tax, Integrated tax, union territory tax or cess);

(i)  Place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce

(j)  Whether the tax is payable on reverse charge basis

(k) Signature or digital signature of the supplier or his authorized representative

It has also prescribed under law that if at the time of receipt of advance, the rate of tax is not determinable, the tax may be paid@18% and if the nature of supply is not determinable, the same shall be treated as inter-State supply.

Moreover, when any receipt voucher is issued for any advance, but subsequently no supply is made and no tax invoice is issued, the registered person who has received the advance payment can issue a refund voucher against such payment.

The GST laws has also prescribed rules and contents for revision of invoice through Debit Notes and Credit Notes. The details contents in respect of these document has been prescribed under the respective rules.

Hence, the registered person needs to adopt a GST enabled accounting software that fulfills the requirement in respect of issuing invoice and/or bill of supply for different transactions and suitably categorized them for the purpose of filing GSTR 1 and GSTR 3B. There are lot of good accounting software are available in the market with facilities of raising invoice for different type of transactions and suitably categorizing these transactions for filing the GST returns.

Leave a Reply

Your email address will not be published. Required fields are marked *