1. The tax invoiceis a standard format required under the GST system. Sec 31 of the CGST Act 2017 mandates the issuance of an invoice or a bill of supply for every supply of Goods or Services.
2. Tax Invoice in respect of Goods:
|Section 31(1)||A registered person supplying taxable goods shall issue a tax invoice.
The invoice shall be issued before or at the time of removal of goods for supply to the recipient.
Where the supply does not involve the movement of goods, the invoice shall be issued when goods made available to the recipient.
|Removal”, in relation to goods, means dispatch of the goods for delivery by the supplier or collection of the goods by the recipient.|
|Proviso to section 31(1)||Central/State Government may, on the recommendation of the GST Council, by notification, specify the categories of goods and/or supplies in respect of which the tax invoice shall be issued,
3. Tax Invoice in respect of Services :
first proviso to Rule 47
Second proviso to Rule 47
|A registered taxable person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, the tax charged thereon, and such other particulars as may be prescribed.
Time limit for issuing tax invoice for services
The invoice in case of a taxable supply of services shall be issued within a period of thirty days from the date of the supply of service.
A banking company or a financial institution, or NBFC, can issue an invoice within forty-five days from the date of supply of service.
An insurer/banking company / financial institution, including a non-banking financial company/ Telecom operator, or any other class of supplier of services as may be notified by the Government making taxable supplies of services between distinct persons as specified in Section 25, may issue the invoice before or at the time recording the same in books of account or before the expiry of the quarter during which the supply was made.
For Example – A Banking company supplies services to its branch on 1st June 2020. The tax invoice may be issued by the bank at the time of recording of the said supply in books of accounts ( say 26th July 2020 ) or before 30th Sep 2020 ( the expiry of the quarter )
4. Rule 46 Contents of Tax invoice:Tax invoice issued by the registered person in respect of goods and services shall be containing the following particulars:
|(a)||Name, address, and GSTIN of the Supplier|
|(b)||The tax invoice number shall consist of – a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters- hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year.|
|(c)||Date of issue of tax invoice|
|(d )||Name, address, and GSTIN of the Recipient|
|(e)||Taxable supply of Rs 50000/- or more to the unregistered recipient – Name, address of the recipient, address of delivery, name of State, and its code.|
|(f)||In the case of taxable supply is less than Rs 50000, the above details in tax invoice are required only if the recipient requests it.|
First proviso to Rule 46.
|HSN code of goods or Accounting Code of services :
CBI&C can give relaxation in indicating the number of digits of HSN /SAC code for the class of registered persons.
|(h)||Description of goods or services|
|(i)||Quantity & unit of measurement (in case of goods).|
|(j)||The total value of the supply of goods or services or both|
|(k)||The taxable value of the supply of goods or services or both|
|(l)||Rate of tax (Central Tax, State Tax, Integrated Tax, Union Territory Tax or cess)|
|(m)||Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess)|
|(n)||Place of supply along with the name of State, in case of Inter-State supply – CBIC vide circular No. 90/09/2019-GST dated 18-2-2019 provided for penalty up to Rs 25000 in case of failure to mention this details in the tax invoice.|
|(o)||Address of delivery where the same is different from the place of supply [In case of a bill to ship to transactions]|
|(p)||Whether the tax is payable on a reverse charge basis|
Fifth proviso to rule 46
|The signature or digital signature of the supplier or his authorized representative
The signature or digital signature of the supplier or his authorized representative shall not be required in the case of issuance of an electronic invoice in accordance with the provisions of the Information Technology Act, 2000.
|Sixth proviso to rule 46||The government may specify that tax invoice shall have Quick Response (QR) Code, subject to conditions and restrictions as may be specified|
4.1 Invoices for Exports or Supplies to SEZ
|Third proviso to Rule 46||In the case of exports of goods or services or supplies to SEZ unit or developer, the invoice shall carry an endorsement as follows:-
Supply meant for Export/ Supply to SEZ/ SEZ Developer for authorized operation on Payment of Integrated Tax.
Supply meant for Export/ Supply to SEZ/ SEZ Developer for authorized operation on Payment of Integrated Tax under Bond or Letter of Undertaking without payment of Tax.
In addition to the other requisite details, the invoice shall contain the name of the Country of Destination.
|The value on the invoice should be transaction value and should match with the value declared in the shipping bill or bill of export. However, if there is a discrepancy, the refund of GST will be on basis of the lower of the two values – CBI&C Circular No. 37/11/2018-GST dated 15-3-2018.|
5. Revised Invoice
Explanation to section 31
|The expression “tax invoice” shall include any revised invoice issued by the supplier in respect of a supply made earlier
Revised invoice: A registered taxable person may, within one month from the date of issuance of a certificate of registration, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of a certificate of registration to him.
The recipient can avail ITC against such a revised invoice issued by the supplier.
The provision covers the period between the date of application and date of issuance of registration certificate but not earlier period during which he was liable to pay GST.
6. Tax Invoice for Small Value :
|Section 31(3)(b)||Tax invoice may not be issued if value goods or services or both is less than Rs 200|
7. Invoice Cum Bill of Supply :
fourth proviso to Rule 46
|A registered person supplying exempted goods and/or service or paying tax as under Composite scheme can issue a single ‘invoice cum bill of supply’
This provision also applies to a person who is paying GST on services under a simplified scheme (small taxable persons paying GST @ 6% on services). Thus, small taxable persons paying GST @ 6% on services shall issue ‘Bill of Supply’ and not ‘tax invoice’.
Where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single “invoice-cum-bill of supply” may be issued for all such supplies.- inserted w.e.f. 13-10-2017
Consolidated Tax Invoice: A registered person shall issue a consolidated tax invoice at the end of each day in respect of supplies where (a) the recipient is an unregistered person; and (b) the recipient does not require such invoice.
8. Receipt Voucher & Refund Voucher
|A registered taxable person shall, on receipt of advance payment with respect to any supply of goods or services by him, issue a receipt voucher, evidencing receipt of such payment
Contents of Receipt Voucher:-
(a) Name, address, and GSTIN of the supplier. (b) A consecutive serial number (c) Date of issue of receipt voucher (d) Name, address and GSTIN of the recipient (e) description of goods or services (f) Amount of advance taken (g) Rate of tax (CGST/ SGST/IGST/UTGST/ CESS) (h) Amount of tax charged in respect of taxable services. (i) Place of supply along with the name of State and its code, in case of an Inter-State (j) Whether the tax is payable on reverse charge basis (k) Signature or digital signature of the supplier or his authorized representative.
Provision for payment of tax on advances received has been deleted vides Notification No. 66/2017-CT dated 15-11-2017. This relaxation is only in respect of the supply of goods and not in respect of services.
|If subsequently, supply is not made and tax invoice not issued, refund voucher should be issued against such payment.
Contents of Refund Voucher are identical to the requirements of Receipt Voucher except for that cross-reference of Receipt Voucher is required and the amount of refund is to be indicated, instead of the amount received as advance.
If refund voucher is made, it should be for the full value of advance including the amount of GST
9. Self invoice and payment voucher for tax under RCM
Second proviso to Rule 46
|A registered person who is liable to pay tax under RCM (reverse charge mechanism)] shall issue a self invoice in respect of goods or services received by him on the date of receipt of goods or services from the unregistered supplier.
A consolidated monthly invoice can be issued if a reverse charge applies under section 9(4) of the CGST Act where the value of such supplies exceeds Rs. 5,000 in a day from any or all suppliers
The consolidated invoice is not permissible in case tax is payable under reverse charge for specific services ( section 9(3) of the CGST Act).
Payment Voucher: payment voucher is required to be issued at the time of payment to the supplier in respect of supplies where tax is payable under reverse charge.
10. Continuous Supplies :
|Section 31(4)||Continuous supply of Goods: “Continuous supply of goods” means a supply of goods which is provided continuously under a contract, whether or not by means of a wire, cable, pipeline or other conduits, and for which the supplier invoices the recipient on a regular or periodic basis and includes the supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify.
In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the 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.
|Section 31(5)||“Continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on a recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes the supply of such services as the Government may, subject to such conditions, as it may, by notification, specify.
In case of a continuous supply of services, provisions for the issue of tax invoice are as below.
Before the due date of payment – Where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment. Receipt voucher is required to be issued in case of advance received.
When due date of payment is not ascertainable, the date on which payment received – Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier receives payment
When payment linked with completion of event i.e. milestones – Where milestones specified in the contract and the payment is linked to the completion of such milestone the invoice shall be issued on or before the date of completion of that milestone.
11. Supply of Services ceases before completion
|Section 31(6)||In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply effected before such cessation|
12. Goods sent on approval basis
|Section 31(7)||Where the goods being sent on approval are removed before the supply takes place, the invoice shall be issued before or at the time of supply or six months from the date of removal, whichever is earlier.
Thus, the tax invoice must be issued within six months from removal.
Goods can be removed on an approval basis within the State or outside the State. Delivery Challan should be issued at the time of removal of goods. E-way bills will also be issued wherever applicable. The person carrying goods for such a supply can carry the invoice book so that he can issue the invoice once the supply is fructified. – CBE&C Circular No. 10/10/2017-GST dated 18-10-2017.
Removal of artwork to galleries for subsequent sale Artists removes their artworks to various galleries where these are exhibited. the artworks should be removed under-delivery challan and e-way bill (where applicable ). Once the artwork is sold, the tax invoice should be generated.
Removal of goods outside India for the exhibition : The removal of goods out of India for exhibition or on a consignment basis for export promotion is neither ‘supply’ nor ‘export’. CBI&C Circular No. 108/27/2019-GST dated 18.07.2019
Since it is not ‘export’, LUT or bond is not required. Goods should be sent under Delivery Challan. The exporter should maintain proper records in the form given in Annexure to the circular dated 18-7-2019. As and when goods are sold, the tax invoice should be issued. If goods are not brought back within six months, a tax invoice should be issued and GST paid.
If goods are sold within six months, refund claim under rule 89(4) of CGST for ITC can be filed even if goods were cleared without bond or LUT.
13. Manner of Issuing Invoices :
|Rule 48(1)||The invoice shall be prepared in triplicate, in case of the supply of goods.
(a) the original copy being marked as ORIGINAL FOR RECIPIENT
(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER
(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER
|Rule 48(2)||In case of the supply of services, the invoice shall be in duplicate –
(a) the original copy being marked as ORIGINAL FOR RECIPIENT
(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER
13.1 Rule 48(3): The serial number of invoices issued during a tax period shall be furnished electronically through the Common Portal in FORM GSTR-1.
13.2 Rule 48(4) E-Invoicing The invoice shall be prepared by such class of registered persons as may be notified by the Government, by including such particulars contained in FORM GST INV 01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Portal
The government will notify a new GST e-invoice scheme under which businesses with a turnover of Rs 500 crore and above will generate all invoices on a centralized Government Portal starting October 1, 2020, The requirement is for supplies made to a registered person only
Every invoice issued by a person who is liable to issue E-Invoice in any manner other than the manner specified shall not be treated as an invoice.
The manner of issuing normal tax invoice shall not apply for issuing E-invoice under Rule 48(4)
14. Section 31A – Specified suppliers to provide the facility of e-payment option to recipients of goods or services: The Government may prescribe a class of registered persons who shall provide prescribed modes of electronic payment to the recipient of the supply of goods or services or both made by him. The suppliers will give the option to such recipient to make payment accordingly, –inserted videFinance (No. 2) Act, 2019.
Thus, the prescribed class of suppliers of goods or services will have to provide options to recipients of goods or services supplied by them, of making e-payment.
It is not mandatory that the recipient must make payment to the supplier through electronic mode only
15. Other Relevant Provisions
Penalty for Non-Compliance:-
15.1 If the tax invoice does not contain all prescribed details, a penalty up to Rs. 25,000 can be imposed – CBIC Circular No. 90/09/2019-GST dated 18-2-2019.
15.2 B2C invoice once issued cannot be converted into B2B tax invoice by adding GSTN – B2C invoice once issued cannot be converted into B2B tax invoice by adding GSTN – FAQ No. 7 issued by CBI&C on banking sector on 27-12-2018. Thus, care has to be taken before uploading the invoice in GSTR1.
15.3 Invoice issued to UN Agencies or embassies should indicate UIN – Supplier supplying goods or services to UN Agencies etc. should charge GST in his invoice. He should indicate UIN of the recipient so that the recipient can claim a refund from Government – CBIC press release dated 27-4-2018.
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Part 22 of the series will cover the topic ” Credit & Debit Notes under Sec 34 of CGST Act 2017