Tax Invoice, Credit and Debit Notes under GST (as on 18 May 2017)

Under the proposed GST regime every registered person supplying goods or services shall issue some document evidencing movement of goods or supply of services within the prescribed time limit and containing all the information & particulars as prescribed under the Act & Rules made there under. This document may be a Tax Invoice , Invoice, Bill of Supply, Delivery Challan, Credit note, Debit note, Payment advice etc.

Difference provisions have been made as regards issue of supply of goods as compared to those related to issue of supply of services. As the time to issue the invoice in case of regular supplies is different as compare to that in case of continuous supplies, so separate provisions have been made for them also.

As we know that under GST tax is payable on receipt of advance also, so specific documents have been prescribed for advance receipts, refunds of advance etc.

In case a particular supply is taxable under Reverse Charge Mechanism, the recipient of such supply shall not only issue a separate payment advice as regards payments made for such supplies, but also where such supplies is received from an un-registered person, the recipient of such supplies shall issue a separate invoice on behalf of that supplier.

There may be various circumstances and situations where normal provisions of issue of invoice shall not apply like in case of supplies made by GTA, Passenger transport agencies, financial institutions, supply though pipe lines etc. normal provisions are not applicable, so separate provisions have been made under GST to issue invoices in these situations.

For the effective recording of a particular business transaction, we should not only know the information that has to be recorded, but the timing when such information has to be transformed into a valid invoice is equally important. In this article we will understand in a tabular format, the time & manner of issuing these documents along with the details & particulars to be mentioned in these documents.

Below is the tabular view showing details of these documents to be issued and Time limit within which such invoice or documents shall be issued:

S.No.	Event	Document	Time of issue
1.	Where a registered person supplies some taxable goods [Section 31(1)]	Such supplier shall issue a Tax Invoice	before or at the time of: (a) removal of goods for supply to the recipient, where the supply involves movement of goods (b) Delivery of goods or making available thereof to the recipient, in any other case. Note: In case of a supply to an un-registered person, it is not mandatory for the supplier to issue a separate tax invoice for such supplies below Rs. 200/-, where such tax invoice is not required by the customer. [Section. 31(1) (3)(b)] and [Fourth proviso to Rule 1] However he shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.
2.	Where a registered person supplies some taxable services [Section 31(2)]	Such supplier shall issue a Tax Invoice	before or after the provision of service but within a period of thirty days from the date of supply of service [Rule 2] Note: In case of a supply to an un-registered person, it is not mandatory for the supplier to issue a separate tax invoice for such supplies below Rs. 200/-, where such tax invoice is not required by the customer. [Section. 31(1) (3)(b)] and [Fourth proviso to Rule 1] However he shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.
3.	In case of continuous supply of goods [Section 31(4)]	Supplier shall issue a Tax Invoice	where successive statements of accounts or successive payments are involved: tax invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.
4.	In case of continuous supply of services [Section 31(5)]	Supplier shall issue a Tax Invoice	(a) in case where due date of payment is ascertainable: Tax invoice shall be issued on or before the due date of payment; (b) in case where due date of payment is not ascertainable: Tax invoice shall be issued On or before the time when the supplier of service receives the payment; (c) in case where payment is linked to the completion of an event: Tax invoice shall be issued on or before the date of completion of that event However, in case of receipt of advance, proper advance receipt voucher shall be issued.
5.	On receipt of advance by a registered person. [Section 31(3)(d)] However where subsequently no supply is made and no tax invoice is issued in pursuance of advance receipt issued, [Section 31(3)(e)]	The recipient shall issue a receipt voucher He shall issue a refund voucher against such payment	At the time of receipt of advance At the time of making refund
6.	In case supply of services ceases under a contract before the completion of the supply [Section 31(6)] For example in case of number portability of post paid mobile connection or discontinuation of services before billing cycle etc.	Supplier shall issue Tax Invoice	Invoice shall be issued at the time when the supply ceases ( invoice shall be issued to the extent of the supply made before such cessation)
7.	In case the goods are removed before the supply takes place i.e. goods are being sent or taken on approval for sale or return [Section 31(7)]	Supplier shall issue Tax Invoice (or a revised tax invoice wherever necessary)	On or before the time of supply (i.e. when goods are accepted) or six months from the date of removal (where goods are neither accepted nor returned for more than 6 months) (whichever is earlier)
8.	In case of supplies made by a Composition dealer or by a registered supplier of exempted goods or services. [Section. 31(1) (3)(c)]	Supplier shall issue Bill of supply in place of Tax Invoice	Note: In case of a supply to an un-registered person, it is not mandatory for the supplier to issue a separate bill of supply for such supplies below Rs. 200/-, where such bill of supply is not required by the customer. [First Proviso to Rule 4] & [proviso to section 31(1)(3)(c)] However he shall issue a consolidated bill of supply for such supplies at the close of each day in respect of all such supplies.
9.	In case of Inward supply of goods/services as notified u/s. 9(3) or inward supply from an unregistered dealer i.e. where • tax payable under reverse charge. And • Supplier is not registered. [Section. 31(1)(3)(f)]	In this case Recipient shall issue Invoice	on the date of receipt of goods or services or both
10.	While making payment in respect of those supplies, which are subject to tax under reverse charge mechanism. [Section. 31(1) (3)(g)]	Recipient shall also issue a Payment Voucher	at the time of making payment to the supplier
11.	For Supplies made during the period beginning with the effective date of registration till the date of issuance of certificate of registration to the supplier. [Section. 31(1) (3)(a)]	Registered person may issue: 1. Revised Invoice [Rule 8(2)] 2. Optional Consolidated revised tax invoice [CRT ]	within one month from the date of issuance of certificate of registration Note: For local supplies: CRT may be issued in respect of all taxable supplies made to a recipient who is not registered under the Act during such period. [first proviso to Rule 8(2)] For Inter state supplies: CRT may be issued, where the value of a supply in a particular state do not exceed Rs. 2,50,000/- in respect of all the unregistered recipients of that single state. [second proviso to Rule 8(2)]
12.	Where any supply made against tax invoice is returned or some excess tax was charged in invoice due to rate difference or any other reason e.g. supply of deficient goods or services, goods returned etc. [Section 34(1)]	Supplier shall issue Credit Note	On the occurrence of such event
13.	Where taxable value or tax charged in tax invoice is found to be less than the taxable value or tax charged in original invoice [Section 34(3)]	Supplier shall issue Debit Note or a supplementary invoice.	On the occurrence of such event
14.	In case of Supplies distributed by the Input Service Distributors (ISD) [ Rule 9(1)] Note: This rule applies to ISD, other than banking company or a financial institution, including a non-banking financial company.	Such Input Service Distributor shall issue an ISD Invoice or ISD Credit Note
15.	In case of Supplies distributed by Input Service Distributors (ISD) being a banking company or a financial institution, including a non-banking financial company. [proviso to Rule 9(1)]	Such Input Service Distributor shall issue any document in lieu of ISD Invoice or ISD credit note, by whatever name called, whether or not serially numbered but containing the information as prescribed u/r 1.
16.	In case of supplier of taxable service being an insurer or a banking company or a financial institution, including a non-banking financial company [ Rule 9(2)]	Such supplier shall issue a Tax invoice or any other document in lieu thereof, by whatever name called, whether or not serially numbered, and whether or not containing the address of the recipient of taxable service but containing other information as prescribed for Tax Invoice under rule 1	Within forty five days from the date of supply of service [First Proviso to Rule 2]
17.	Where supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, [Rule 9(3)]	Such GTA shall issue a tax invoice or any other document in lieu thereof, by whatever name called, containing some additional details along with other information as prescribed for Tax Invoice under rule 1.
18.	Where supplier of taxable service is supplying passenger transportation service. [Rule 9(4)]	Such supplier shall issue a tax invoice which includes a ticket in any form, by whatever name called, whether or not serially numbered, and whether or not containing the address of the recipient of service but containing other information as prescribed for Tax Invoice under rule 1.
19.	Where Supplier of services is: • an insurer or • a banking company or • a financial institution, • a non-banking financial company, or • a telecom operator, or • any other class of supplier of services as may be notified by the Government and such supplier is making taxable supplies of services between distinct persons.	Such supplier shall issue an Invoice.	before or at the time such supplier records the same in his books of account or before the expiry of the quarter during which the supply was made. [second proviso to Rule 2] Note: • A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. [Section 25(4)] • Also making supplies without consideration (excluding gifts upto Rs. 50,000/- in a financial year by an employer to an employee ) shall also be treated as taxable supplies of services between distinct persons [Entry 2 of Schedule I.]
20.	In case of: • supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known, • transportation of goods for job work, • transportation of goods for reasons other than by way of supply, or • such other supplies as may be notified by the Board, [Rule 10(1)]	Such supplier shall issue Delivery Challan	at the time of removal of goods for transportation

Some important points:

1. The serial number of invoices issued during a tax period shall be furnished electronically in FORM GSTR-1. [Rule 3(3)]

2. Details of credit notes issued shall be declared in the return for the month during which such credit note has been issued.

However Credit note shall be issued & declared not later than the month September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier.

2. Also no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
[Section 34(2) and proviso thereof]

3. Details of debit notes issued shall be declared in the return for the month during which such debit note has been issued. Since under GST both debit notes and credit notes are to be issued only by a supplier and in case of debit note there will definitely be immediate increase in tax liability of the supplier, though the recipient may or may not claim the benefit of this increased tax due to many reasons like recipient may be a composition dealer, a customer etc. so, no such extended time limit to issue debit notes is provided in the Act. [Section 34(4)]

4. In case of Exports of Goods or Services , there are some additional information which is required to be mentioned on Tax invoice & Bill of Supply. The invoice shall carry an endorsement

“SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST”

or

“SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”

and the invoice shall contain the following details, in lieu of the general details of the recipient:

(i) name and address of the recipient;

(ii) address of delivery;

(iii) name of the country of destination; and

[Third Proviso to Rule 1] & [First Proviso to Rule 4]

5. In the invoice issued by transporter of goods , apart from the regular information, some additional detail is also required under rule 9(3) to be disclosed in the invoice. These are:

1. The gross weight of the consignment.
2. Name of the consignor and the consignee.
3. Registration number of goods carriage in which the goods are transported.
4. Details of goods transported, details of place of origin and destination.
5. GSTIN of the person liable for paying tax whether as consignor, Consignee or goods transport agency.

6. Any invoice or debit note issued in pursuance of any tax payable in accordance with the provisions of section 74 (Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts).or section 129 (Detention, seizure and release of goods and conveyances in transit. )or section 130 (Confiscation of goods or conveyances and levy of penalty).shall prominently contain the words “INPUT TAX CREDIT NOT ADMISSIBLE”. [Rule 8 (3)]. So this means that even government will issue debit notes for tax demands including penalties.

7. Where goods are being transported on a delivery challan in lieu of invoice, the same shall be declared in FORM [WAYBILL]. [Rule 10 (3)]

8. Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue delivery challans at the time of removal of goods for transportation and shall issue a tax invoice after delivery of goods. [Rule 10(4)]

9. Where the goods are being transported in a semi knocked down or completely knocked down condition,

(a) the supplier shall issue the complete invoice before dispatch of the first consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;

(c) each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice; and

(d) the original copy of the invoice shall be sent along with the last consignment.

[Rule 10(5)]

10. Provisions related to manner of issuing of invoices as provided in Rule 9(2) to 9(4) i.e. in case of supply of service by an insurer or a banking company or a financial institution, including a non-banking financial company and a supplier of passenger transportation service apply mutatis mutandis to all the provisions of Bill of Supply, Receipt Voucher, refund Voucher, Payment Voucher, Revised Tax Invoice, Debit Note & Credit Note. So these documents shall also contain all the information as required in Tax Invoice, wherever required .[Rule 9(5)]

11. Any tax invoice or any other similar document issued under any other Act for the time being in force in respect of any non-taxable supply shall be treated as bill of supply for the purposes of the Act. [Second proviso to Rule 4 ]

12. By the placement of second proviso to Rule 8(2), though it seems that this proviso regarding (permission to issue a consolidate Revised Tax Invoice for all Inter state supplies made by a registered person, where the value of a supply in a particular state do not exceed Rs. 2,50,000/- in respect of all the unregistered recipients of that single state), applies only to supplies made by a person during the period beginning with the effective date of registration till the date of issuance of certificate of registration to the supplier under Section. 31(1)(3)(a), however in our opinion, this rule is applicable for all registered persons.

All the information required to be disclosed in the invoice, receipts, debit notes etc. is incorporated in the respective formats of these invoices and documents, and they are attached here for you reference.

Suggestions are invited at khatrimithun@hotmail.com

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