Ashish Mittal

Ashish Mittal

Background:

The esteemed vision of Hon’ble Prime Minister to create a digital and paper less economy cannot be crystalize without the digitalization of documentation and removal of hurdle of hard document. With the aforementioned vision, targets are being set out and focus shifting towards digital economy which is clearly evident through its impact on current tax regimes via various modification in current tax laws. Keeping the same in mind great emphasis have been given in draft Model GST model Law (hereinafter referred to as “MGL”) while drafting various provisions relating to invoices under the CHAPTER- VII with four notified sections ranging from Section 28 to Section 31 read with separate set of rules and Performa of Invoices as revised on 25th November 2016 with suitable modification from the earlier draft by understanding the view of industry and suggestion of empowered GST council.

Applicability

Invoices being an important document need to properly issue as per the statue for uninterrupted flow of credit as well as compliance of law in force. In this regards at the outset a quick overlook of applicability of the same on different category of persons in different situation of supply need to be made which can be summarized providing the gist of the content in lucrative manner in the infra stated table along with certain special remarks capturing the if’s and but’s following which an impact study on industry can be made. The various applicable invoices in different cases are summarized below in tabular manner for a quick list of the various categories and types of invoice:

Short Table Regarding Issuance of Invoice under Sec. 28, 29 read with Invoice Rules
S.No. Registered Taxable Person involved in following type of Supply Whether Following Types of Invoice Applicable
Tax Invoice Revised Invoice Supplementary Invoice Bill of Supply
1 Supplying Taxable Goods Yes Yes Yes No
2 Supplying Taxable Services Yes Yes Yes No
3 Supplying Non-Taxable Goods No Yes No Yes
4 Supplying Non-Taxable Services No Yes No Yes
5 Paying Tax Under Sec. 9 No Yes No Yes
For Content of Each Invoice Refer Infra mentioned content list.

Legal Content of Various Invoices:

Once the applicability for various invoices t different situation is determined now it is very much relevant for the legal support of the aforementioned tabulated content. In this regards following table of legal content have been inserted to summarize the same:

Statement showing Table summarizing Various legal content in respect to Issuance of Invoice under Sec. 28 read with Invoice Rules
S.No. Registered Taxable Person involved in following type of Supply Types of Invoice
When to issue Tax Invoice? When to issue Bill of Supply Revised Invoice Supplementary Invoice
1 Supplying Taxable Goods Before or at the time of
1. Removal involving movement of goods
2. Delivery or making available in other cases
to the recipient
Note: In relation to Certain Special category of goods or supplies being notified, deeming provisions have been inserted to consider other documents as tax invoice (Discussed later in details) (Section 28(1))
Not Applicable When: Can be Issued within One month from of receiving the certificate of registration (hereinafter referred as ‘RC’).
Reference: In relation to invoices issued between starting of registration and receipt of certificate of registration.
Effect & Requirement:  This provision have inserted, since the recipient of supply would be having provisional Id mentioned in the invoice which could contradict at time of availing Input tax credit.
Can Issue if
1. Taxable Value
2. Tax Amount
is less than actual value of supply
2 Supplying Taxable Services Before or after but within 30 or 45 days (Refer Special Note 1) of provision of service.
Note: In relation to Certain Special category of services being notified, deeming provisions have been inserted to consider other documents as tax invoice (Discussed later in details) (Section 28(2))
Not Applicable Can Issue if
1. Taxable Value
2. Tax Amount
is less than actual value of supply
3 Supplying Exempted Goods Not Applicable A bill of Supply shall be issued in lieu of Tax Invoice
No such document is required where value of supply is less than Rs. 100 unless the recipient require the same.
Not Applicable Not Applicable
4 Supplying Exempted Services Not Applicable Not Applicable Not Applicable
5 Composition Supplier Under Sec. 9 Not Applicable Not Applicable Not Applicable
For Content of Each Invoice Refer Infra mentioned content list.

Special Note 1: In Case of Supply of Service Invoice shall be issued in:

1. Normal Supply–30 days/45 days in Banking Co./NBFC/Financial Institution from date of supply

2. Continuous Supply–within 30 days of each event specified in the contract as date of supply

Special Points in different Situations:

In respects to certain situations wherein the time of issue of invoice or certain stated situation which may give rise to dispute has been covered in the MGL draft. The same has been summarized below separately for the ready reference in a tabulated manner:

S.No. Situations When the Invoice need to be Issued?
1 Advance payment Registered taxable person need to issue “Receipt Voucher or other Documents”
2 Reverse Charge Mechanism under Sec. 8(3) Invoice to be issued by recipient in case supplier is unregistered
3 Continuous supply of goods Involves Successive Statements or Payment–then in such case when such event occurs
4 Continuous supply of services 1. Due Date Available–before or after arising of liability for payment subject to 30/45 days limit (Refer Special Note-1 above)
2. Due Date Not Available–before or after payment is received by supplier subject to 30/45 days limit (Refer Special Note-1 above)
3. For Completion of an event–before or after event is completed subject to 30/45 days limit (Refer Special Note-1 above)
4. Cancellation of Supply of Service–when supply ceases valued up to the cessation date
Note:  CG/SG may specify continuous supply of service as deemed fit.
5 Goods sent or taken on approval or sale or return or similar terms At or before time when supply occurrence took place
or
6 month from removal
whichever is earlier

Concept of Debit and Credit Note (Section-24):

A summarized table stating various question is comparison form in relation to debit and credit note have inserted herewith for quick reference to the issue and is various aspects:

Statement Showing All about Debit and Credit Note (Section-24)
Basis Tax Invoice issued for Goods or Service and Taxable Value or Tax is in
Excess of Actual Supply Deficient of Actual Supply
What Document to be Issued Credit Note Debit Note
Who Will Issue Supplier Supplier
To Whom Recipient Recipient
Last Date 30th Sept.(of Subsequent F.Y)
or
Date of Annual Return
Whichever is Earlier
When it Can’t be Issued When incidence of tax & interest is passed N.A
Disclosure Requirement Take the effect of above Notes in the
1. Month of Issue or
2. Subsequent Return But Before Next Year Sept. Return or
3. Annual Return
For Content of Each Invoice Refer Infra mentioned content list.

Content of Various Invoices:

1. As per Rule-1 Tax invoice shall include following details:-

(a) Name, address and GSTIN/ Unique ID Number (recipient) of supplier & recipient;

(b) A consecutive unique serial number of F.Y;

(c) Date of its issue;

(d) If unregistered and taxable supply of 50,000 or More—-then name, address of recipient &

Delivery address, state name and code

Note: In case of Export: Instead of (d) point following need to be furnished:

(i) Name and address of the recipient & address of delivery;

(ii) “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST” shall be prominently mentioned on the invoice;

(iii) Name of the country of destination; and

(iv)  Number and date of application for removal of goods for export [ARE-1].

(e) HSN code of goods or Accounting Code of services;

(f) Description of goods or services;

(g) Quantity in case of goods and unit or Unique Quantity Code thereof;

(h) Total value & taxable value (after discount and abatement) of goods or services;

(i) Rate and amount of tax (CGST, SGST or IGST);

(j) In interstate supply—place of supply with state name

(K) Place of delivery where the same is different from the place of supply;

(l) Whether the tax is payable on reverse charge;

(m) The word “Revised Invoice” or “Supplementary Invoice”, at prominent place where

Applicable with date & invoice number of original invoice; and

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

2. As Per Rule-3 Bill of Supply shall include following details:-

(a) Name, address and GSTIN/ Unique ID Number (recipient) of supplier & recipient;

(b) A consecutive unique serial number of F.Y;

(c) Date of its issue;

(d) HSN code of goods or Accounting Code of services;

(e) Description of goods or services;

(f) Total value (after discount and abatement) of goods or services;

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

Note: If Value <100, then No Bill of Supply Required, But consolidated bill at end of day is required.

3. As Per Rule-4 Supplementary tax invoice and Credit or debit notes shall include following details:-(Rule-4)

(a) Name, address and GSTIN/ Unique ID Number (recipient) of supplier & recipient;

(b) A consecutive unique serial number of F.Y;

(c) Date of its issue;

(d) HSN code of goods or Accounting Code of services;

(e) Description of goods or services;

(f) Taxable value of goods or services, rate of tax and the amount of the tax credited

Or debited to the recipient

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

(h) Nature of the document;

(i)  If unregistered—-then name, address of recipient & delivery address, state name and code;

(j) S.No. & date of the corresponding tax invoice or bill of supply

Note: 1. Revised Invoice can be issued if registration granted previous to issuance of RC

2. Consolidated Revised invoice for interstate supply up to Rs. 250 can be issued.

4. As Per Rule-5 Input Service Distributor (ISD) Invoice shall include following details:-

(a) Name, address and GSTIN/ Unique ID Number (recipient) of ISD & recipient of credit;

(b) A consecutive unique serial number of F.Y;

(c) Date of its issue;

(d) Amount of credit distributed;

(e) Name, address and GSTIN of supplier whose credit distributed

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

5. For Banking Company, Financial Institution and NBFC shall include:

1. All above Information.

2. Not necessarily Serially Numbered

3. Any other Documents Instead of Tax Invoice.

6. For GTA:

Consignment Note Shall be deemed to be Tax Invoice

7. For passenger transport:

Ticket shall substitute tax Invoice

Certain Common Points:

Rule-2 Manner of Issuing Invoice
A. For Goods B. For Service
In Triplicate Marked on Each Invoice i.e.
ORIGINAL FOR RECIPIENT, DUPLICATE FOR TRANSPORTER (Not Required if Invoice Reference Number Mentioned), TRIPLICATE FOR SUPPLIER
In Duplicate Marked on Each Invoice i.e. ORIGINAL FOR RECIPIENT, DUPLICATE FOR SUPPLIER
Note: Invoice Ref. No. can be obtained from portal in FORM GST INV-1 valid for 30 days.
Note on HSN/SAC Code
A. For Goods B. For Service
1. T/o<=1.5 Cr. —-NO HSN Code
2. 1.5 Cr. <T/o<5Cr—-2 Digit HSN
3. T/o>5Cr.—-4 Digit HSN
 Services Accounting Code (SAC) would be used

(Author can be reached at Email Id.- ashishmittal5555@gmail.com)

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Category : Goods and Services Tax (2658)
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Tags : goods and services tax (1253) GST (836)

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