Know all types of invoices comes under the GST Law in India. Visit earlyGST guide section for details such as time limited to issuing invoices and signing the invoice, etc.

Invoicing under GST

Last Update Date : January 08, 2018

An invoice is a primary document used to assess the levy of any tax related to the transfer of goods or services. Under the new Goods and Services Tax (GST) regime, the government is implementing a new, comprehensive invoicing format that should facilitate the computation of taxes on invoiced goods or services.

Types of Invoices under Previous Indirect Tax Regime

Under the indirect tax regime, there are two kinds of invoices that are issued, namely, the tax invoice and the retail or commercial invoice. We have provided a brief of the two as follows –

  • Tax invoice
  • Retail or commercial invoice

Tax Invoice

  • Issued to registered dealers;
  • May be used for claiming input tax credit;
  • May be in the form of an Excise invoice under Rule 11 of the Central Excise Rules, 2002 or as a Tax Invoice;
  • Details such as buyer’s details (personal and order related), description of goods, excise and VAT levied on the goods etc. are required to be furnished for an Excise Invoice;
  • Details such as buyer’s details (personal and order related), description of the goods, VAT levied on the goods are required to be furnished for the tax invoice.

Retail or Commercial Invoice

  • Issued to an unregistered dealer or a retail customer;
  • May not be used for claiming any input tax credit;
  • Details such as buyer’s details (personal and order related), delivery note related details, description of the goods, VAT levied on the goods are required to be furnished for the tax invoice.

Types of Invoices under GST

There will be two types of invoices under the new regime: a tax invoice and a bill of supply. Let’s examine the differences between them:

  • Tax invoice
  • Bill of supply

Tax Invoice

A registered supplier must issue a tax invoice when supplying taxable goods or services. Specific rules regarding the use and contents of the invoice apply:

  • Serial number of the invoice: Serial numbers are consecutive and consist of letters, numbers, special characters, or any combination thereof; they are unique for each financial year.
  • Billing and Shipping Address: This information is required as it will ultimately determine the Place of Supply and the taxation of such transaction accordingly.
  • GSTIN/unique ID: A GST identification number is required for the receiver. There are specific codes for UN bodies, embassies, or any other class of persons so notified.
  • HSN code/accounting code: The notified person must include an HSN code for the goods and an accounting code for the services supplied.

Bill of Supply

A registered supplier will issue a bill of supply when:

  • The goods or services supplied are exempt
  • The supplier opts to pay taxes under Composition Scheme

As per the rules governing the bill of supply, it must contain the following details:

  • Serial number: The serial number should be a consecutive number consisting of letters and/or numbers and should be unique for one financial year.
  • Details of receiver: Provide the name, address, and GSTIN/unique ID of the receiver only if the receiver is registered.
  • Particulars of goods: For the supply value of goods or services, the term “value” is used instead of “taxable value,” as in the tax invoice.

If the value of the goods or services supplied is less than Rs 200, there is no need to issue a bill of supply.

Time Limits for Issuing the Invoice

  • Supply of goods: Where supply involves the movement of goods, the registered person must issue an invoice at the time of removal of goods for supply to the recipient. In other cases, the invoice should be at the time the goods are delivered or made available to the recipient.
  • Supply of services: The tax invoice should be issued within 30 days from the date of completion of services unless the transaction involves banks or financial institutions, in which case the invoice should be issued within 45 days.
  • Receipt voucher: A receipt voucher or other prescribed documents should be issued as an advance receipt on the supply of goods or services.
  • Reverse charge mechanism: If an unregistered person supplies goods and services, the registered receiver must issue an invoice on the date of receipt of goods or services. The recipient, not the supplier, is liable for the payment of tax.
  • Continuous supply of goods: When goods and services are supplied — and payment is made — periodically, the registered supplier must issue an invoice along with each such statement or payment.

Number of Copies of Invoice under GST

In case of supply of goods, three copies will be prepared:

  • Original for Recipient
  • Duplicate for Transporter
  • Triplicate for Supplier

In case of supply of services, two copies will be prepared:

  • Original for Recipient
  • Duplicate for Supplier

Revising the Value of an Invoice

In case of supply of goods, three copies will be prepared:

  • 1. Original for Recipient
  • 2. Duplicate for Transporter
  • 3. Triplicate for Supplier

To revise the taxable value or GST charged on an invoice already issued, one may issue a debit note or credit note: 

  • Debit note: Issued when the taxable value and/or GST charged on the invoice must be increased.
  • Credit note: Issued when the taxable value and/or GST charged on the invoice must be reduced.

A credit note related to an invoice of a financial year can be issued before September 30 following the end of the financial year or the date of filing of the relevant annual return, whichever is earlier. For example, Company A files its annual return for the financial year 2016-17 on May 31, 2017, and Company B files its annual return on December 1, 2017. Company A can issue a credit note about the supply made in FY 2016-17 by May 31, 2017, and Company B can issue a credit note by September 30, 2017.

Signing the Invoice

The registered person or authorised representative of the registered person is required to sign the invoice either physically or digitally via Digital Signature Certificate. All invoices must adhere to the rules framed under GST India to avoid penalties for non-compliance. Proper invoicing should enable the administration of the successful digital compliance under GST regime.

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