CA Akarsh Gupta

CA Akarsh GuptaIntroduction

With GST being thoroughly implemented by the Govt. there are certain issues which are still being faced by certain taxpayers all over India. The first and foremost of those hurdles are that of invoicing under the GST regime. Through this article, we have tried to put together a summary of all the invoicing rules and provisions into one thread and help everyone in implementing GST invoicing into their accounting systems. We have tried to encapsulate the most crucial points which need to be fixed in mind at the time of invoicing or preparing other documentation such as vouchers etc. by businessmen. Further, to comprehend those provisions we have prepared a certain set of questions which are concerning a businessmen mind and are answered in a most easy way to be understood.

1. Invoicing Rules

(a) What the GST Law says?

Rule 46 of the CGST Rules, 2017

Rule 46 specifies the contents of an Invoice, which are:

a) name, address and GSTIN of the supplier

b) Consecutive serial no.s, in one or multiple series, not exceeding 16 alpha-numeric characters including “/” and “-” respectively, unique for a financial year

c) Date of its issue

d) name, address and GSTIN (if registered) of the recipient

e) name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is un-registered and where the value of the taxable supply is fifty thousand rupees or more

f) name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is un-registered and where the value of the taxable supply is less than fifty thousand rupees and the recipient requests that such details be recorded in the tax invoice

g) HSN/SAC code for goods or services

h) description of goods or services

i) quantity in case of goods and unit or Unique Quantity Code thereof

j) total value of supply of goods or services or both

k) taxable value of the supply of goods or services or both taking into account discount or abatement, if any

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 the State, in the case of a supply in the course of inter-State trade or commerce

o) address of delivery where the same is different from the place of supply

p) whether the tax is payable on reverse charge basis

q) signature or digital signature of the supplier or his authorised representative

(b) Time Limit for issue of Tax invoice

Section 31

In case of Goods

before or at the time of

(a)removal of goods for supply to the recipient, where supply involves movement of goods or

(b)delivery of goods or making available thereof to the recipient in other cases

Rule 47

In case of Services before or within:

▪30 days from the date of supply of service

▪45 days in case of Banks/NBFCs

(c) No of digits of HSN/SAC to be mentioned

Notification 12 of 2017-Central Tax

(d) Manner of issuing invoice

Manner of issuing invoice

Rule 48

*The serial number of invoices issued during a tax period shall be furnished electronically through the common portal in FORM GSTR-1

(e) Invoicing for Reverse charge

Proviso to Rule 46

Provided further that where an invoice is required to be issued under clause (f) of sub-section (3) of section 31, a registered person may issue a consolidated invoice at the end of a month for supplies covered under sub-section (4) of section 9 (reverse charge), when the aggregate value of such supplies exceeds rupees five thousand in a day from any or all the suppliers

(f) Invoicing in case of supply to unregistered person

Proviso to Rule 46

Provided also that a registered person may not issue a tax invoice in accordance with the provisions of clause (b) of sub-section (3) of section 31 (supply of less than two hundred rupees) subject to the following conditions, namely,-

(a) the recipient is not a registered person; and

(b) the recipient does not require such invoice, and

shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.

(g) Bill of Supply (Rule 49)

When and who has to issue a Bill of Supply?

A bill of supply referred to in clause (c) of sub-section (3) of section 31 shall be issued by:

  • registered person supplying exempted goods or services
  • Person registered under composition scheme

(h) Receipt Voucher (Rule 50)

When to be made?

As per Section 31(3)(d) of CGST Act, 2017, a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment.

Contents of Receipt Voucher

a) Name, address and GSTIN of the supplier

b) 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 symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year

c) date of its issue

d) name, address and Goods and Services Tax Identification Number or Unique Identity Number, 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 authorised representative

Proviso

where at the time of receipt of advance,-

(i) the rate of tax is not determinable, the tax shall be paid at the rate of eighteen per cent.;

(ii) the nature of supply is not determinable, the same shall be treated as inter-State supply

(i) Refund Voucher (Rule 51)

When to be made?

As per Section 31(3)(e) of CGST Act, 2017, where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment.

Contents of the Refund Voucher

(a) name, address and Goods and Services Tax Identification Number of the supplier;

(b) 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 symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year;

(c) date of its issue;

(d) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient;

(e) number and date of receipt voucher issued in accordance with the provisions of rule 50;

(f) description of goods or services in respect of which refund is made

(g) amount of refund made;

(h) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

(i) amount of tax paid in respect of such goods or services (central tax, State tax, integrated tax, Union territory tax or cess);

(j) whether the tax is payable on reverse charge basis; and

(k) signature or digital signature of the supplier or his authorised representative

(j) Payment Voucher for reverse charge(Rule 52)

When to be made and who has to make it?

As per Section 31(3)(g) of CGST Act, 2017, a registered person who is liable to pay tax under reverse charge has to issue payment voucher at the time of making payment to the supplier

Contents of Payment Voucher

a) name, address and Goods and Services Tax Identification Number of the supplier if registered;

b) 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 symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year;

c) date of its issue;

d) name, address and Goods and Services Tax Identification Number of the recipient;

e) description of goods or services;

f) amount paid;

g) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

(k) Revised tax invoice and credit or debit notes (Rule 53)

Contents:

a) the word “Revised Invoice”, wherever applicable, indicated prominently;

b) name, address and Goods and Services Tax Identification Number of the supplier;

c) nature of the document;

d) 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 symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year;

e) date of issue of the document;

f) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient

g) 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;

h) serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;

i) value of taxable supply of goods or services, rate of tax and the amount of the tax credited or, as the case may be, debited to the recipient; and

j) signature or digital signature of the supplier or his authorised representative

(l) Concept of Revised Invoice

When to be used?

Concept of Revised Invoice(m) Concept of Consolidated Revised Invoice

When to be used?

  • registered person may issue a consolidated revised tax invoice in respect of all taxable supplies made to a recipient who is not registered under the Act during such period
  • in the case of inter-State supplies, where the value of a supply does not exceed two lakh and fifty thousand rupees, a consolidated revised invoice may be issued separately in respect of all the recipients located in a State, who are not registered under the Act

(n) Concept of Credit/Debit Notes (Section 34)

Courtesy: IDTC, ICAI

Concept of Credit Debit Notes in GST

*Registered taxable person issuing Debit / Credit notes to declare its details in the return for the month during which such notes are issued / received or in the return for any subsequent month but not later than September following the end of FY of supply, or the date of filing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in the manner specified in this Act.

(o) Tax invoice in special cases (Rule 54)

In case of ISD issuing an invoice or a credit note shall contain the following:

a) name, address and Goods and Services Tax Identification Number of the Input Service Distributor;

b) 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 symbolised as- “-”, “/” respectively, and any combination thereof, unique for a financial year

c) date of its issue;

d) name, address and Goods and Services Tax Identification Number of the recipient to whom the credit is distributed;

e) amount of the credit distributed; and

f) signature or digital signature of the Input Service Distributor or his Authorised representative

In case of Goods Transport Agency supplying goods by road, shall issue tax invoice or any other document containing:

a) gross weight of the consignment, name of the consigner and the consignee,

b) Registration number of goods carriage in which the goods are transported, details of goods transported,

c) details of place of origin and destination,

d) Goods and Services Tax Identification Number of the person liable for paying tax whether as consigner, consignee or goods transport agency

In case of supplier supplying passenger transportation service, the tax invoice shall include ticket in any form

(p) Transportation of goods without invoice(Rule 55)

Cases in which consigner issues a delivery challan in lieu of invoice:

a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,

b) transportation of goods for job work,

c) transportation of goods for reasons other than by way of supply, or

d) such other supplies as may be notified by the Board

Consigner must issue delivery challan (in sixteen characters) containing, the following:

i. date and number of the delivery challan;

ii. name, address and Goods and Services Tax Identification Number of the consigner, if registered;

iii. name, address and Goods and Services Tax Identification Number or Unique Identity Number of the consignee, if registered;

iv. Harmonised System of Nomenclature code and description of goods;

v. quantity (provisional, where the exact quantity being supplied is not known);

vi. taxable value;

vii. tax rate and tax amount – central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee

The delivery challan must be prepared in triplicate?

  1. Original for Consignee
  2. Duplicate for Transporter
  3. Triplicate for Consigner

2. Specific Questions on Invoicing

Question 1: What are the different types of invoices to be raised under the GST regime?

Ans: There are only two types of invoices which are:

a) Tax Invoice

b) Bill of Supply

There is no concept of Retail Invoices and Service Invoices under GST regime

Question 2: Is mentioning of PAN compulsory in the GST invoices?

Ans: W.e.f 1st January, 2016, quoting of PAN is compulsory for sale or purchase, by any person, of goods or services of any nature exceeding Rs. 2 lacs. Though this is a provision of Income Tax, we still believe that this requirement should be taken care of while issuing invoices.

Question 3: What are the maximum no of characters that are allowed in serial no. of invoices?

Ans: 16 characters (alphanumeric) including “/” and “-”

Question 4: When do I need to mention the name and address of the unregistered person in the invoices?

Ans: When the value of supply is above Rs. 50,000. However, the recipient can also request for mentioning the details even when the invoice is of less than fifty thousand rupees.

Question 5: When is Tax invoice issued in case of supply of goods?

Ans: Movement of goods: before or at the time of removal of goods

In-hand delivery: before or at the time of delivery of goods to the recipient

Question 6: When is Tax invoice issued in case of supply of services?

Ans: Before or within:

  • 30 days from the date of supply of service
  • 45 days in case of Banks/NBFCs

Question 7: When is Tax invoice issued in case of continuous supply of goods?

Ans: In case of continuous supply of goods where successive statements of accounts/ payments are involved, invoice shall be issued before or at the time of each such statements/ payments.

Question 8: How is invoicing done in case of sale on approval basis?

Ans: In such cases, as per sec. 31(7) tax invoice need not be raised at the time of removal. This is because the removal cannot be said to be made for the purpose of supply to the recipient, as it is not certain (at the time of dispatch of goods) that the sending of goods will result in a ‘supply’.

However, on or before the confirmation of the supply by the other party, the tax invoice has to be issued. The law provides a time limit of 6 months from the date of removal, during which the goods will not be treated as supplied. Where no confirmation is received within such period, a tax invoice should be issued on the day immediately succeeding the 6-month period.

Question 9: When an invoice is issued under a reverse charge?

Ans: When the tax liability is on the recipient for the reason that the supplier of goods or services is an unregistered person, the recipient will be required to issue an invoice in respect of such goods or services. This concept is known as Self-invoicing.

Question 10: When such self-invoice has to be issued under reverse charge?

Ans: A registered person may issue a consolidated invoice at the end of a month for supplies covered under reverse charge, when the aggregate value of such supplies exceeds Rs. 5,000 in a day from any or all the suppliers

Question 11: When is a payment voucher to be generated under reverse charge?

Ans: As per Section 31(3)(g) of CGST Act, 2017, a registered person who is liable to pay tax under reverse charge has to issue payment voucher at the time of making payment to the supplier.

Question 12: How is invoicing done in case of supply to unregistered person?

Ans: When an individual supply is less than Rs. 200, the supplier shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.

Question 13: Can an unregistered person issue a tax invoice?

Ans: No, an unregistered person cannot collect taxes and hence cannot issue a tax invoice. He/she will need to issue a ‘Bill of supply’.

Question 14: What will happen in case an advance is received against supply of goods or services?

Ans: A registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment.

Question 15: What will happen in case an advance is received against supply of goods or services and rate of tax is not determinable?

Ans: The rate of tax to be applied is 18%

Question 16: What will happen in case an advance is received against supply of goods or services and nature of supply is not determinable?

Ans: The nature of supply to be mentioned is inter-state supply.

Question 17: When is refund voucher to be issued?

Ans: Where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment

Question 18: When is a revised invoice issued?

Ans: When, a person becomes liable for registration, obtains registration within 30 days of him becoming liable for registration, the effective date of registration would be his becoming liable for registration and not the date of grant of registration. The invoices issued between the period of effective date of registration and grant of registration will have to be revised and revised invoices will be issued for collecting taxes against such invoices.

Question 19: Can a consolidated ‘revised invoice be issued to every recipient for supplies made during the period before registration is granted?

Ans: It is mandatory to issue separate tax invoices in the following cases:

a) Supplies to registered persons;

b) Inter-state supplies to unregistered persons where the taxable value of the supply exceeds Rs. 250,000.

A consolidated invoice can be issued to an unregistered recipient (State-wise consolidation) not covered above.

Question 20: How is invoicing done in case of continuous supply of services?

Ans: In case of continuous supply of services

a) Due date ascertainable – invoice to be issued before / after payment is liable to be made by recipient but within prescribed period (whether or not payment received)

b) Due date not ascertainable – invoice to be issued before / after each such time supplier receives payment but within prescribed period

c) Payment linked to completion of an event – invoice to be issued before / after time of completion of that event but within prescribed period

Question 21: Are credit notes required to be reported in monthly returns?

Ans: Credit notes are to be disclosed in the GSTR-01 filed for the relevant tax period

Question 22: Are debit notes required to be reported in monthly returns?

Ans: Debit notes are just like supplementary invoices and are necessary to be disclosed in the GSTR-01 filed for the relevant tax period

Question 23: Can a composition scheme dealer issue tax invoices?

Ans: Since, a composition scheme dealer is not allowed to collect taxes, they cannot issue Tax invoices. They can only issue a bill of supply.

Question 24: Does the composition scheme dealers require to mention their nature of registration on bill of supply?

Ans: They need to mention prominently the following words: “Composition scheme dealer, not eligible to collect taxes”.

Question 25: Is an Input Service Distributor required to raise tax invoices, though no taxable supplies are made by him?

Ans: Yes. An Input Service Distributor (ISD) should issue a tax invoice being an ‘ISD invoice’ for distributing credits to the GST registrations that have the same PAN as that of the ISD.

(The author is a practising Chartered Accountant based in Delhi and can be reached at guptaakarsh92@gmail.com or +91 9717244288)

Disclaimer: The contents of this document are solely for informational purpose. While due care has been taken in preparing the above article, possibility of any errors and omissions cannot be ruled out. Moreover, the views expressed herein above are solely author’s personal views. No part of it should be copied or reproduced without written or express permission of the Author.

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8 responses to “Understanding GST Invoicing Provisions (supplemented by FAQs)”

  1. BASANT KUMAR GUPTA says:

    RULE 46(p) SAYS “WHETHER THE TAX IS PAYABLE ON REVERSE CHARGE BASIS” IS TO MENTION ON TAX INVOICE. CLARIFY IN DETAIL WHAT DOES IT MEANS?when I am a registered person and issuing tax invoice and charging there cgst/sgst/utgst/igst as the case may be then where is the question of reverse charge applicability arise on my buyer.

  2. BASANT KUMAR GUPTA says:

    RULE 46(p) SAYS “WHETHER THE TAX IS PAYABLE ON REVERSE CHARGE BASIS” IS TO MENTION ON TAX INVOICE. CLARIFY IN DETAIL WHAT DOES IT MEANS?when I am a registered person and issuing tax invoice and charging there cgst/sgst/utgst/igst as the case may be then where is the question of reverse charge applicability arise on my buyer. That is clarification I want to know,

  3. Rajendra Prasad K says:

    Very informative report on invoicing. Thank you!

  4. Jaivik Patel says:

    This information provides me a depth knowledge about invoicing thank you very much, Sir.

  5. pankaj bansal says:

    Question :- whether GST under reverse charge shall paid be by us in July ? because as per section 12(1) of CGST ACT , the liability to pay tax on goods shall arise at the time of supply and the time of supply at the time of advance payment as per clause (b) of sub section (3) of section 12 ?

  6. pankaj bansal says:

    if we pay advance payment by bank (say Rs one lakh ) to a unregistered supplier of taxable goods on 18th July 2017 and goods shall be supplied by suppliers in August 2017 which shall be received by us in August 2017 , whether GST under reverse charge shall be by us in July or August ?

    • Pankaj Malik says:

      Liability to pay GST will arise in July i.e. at the time of payment of Advance. Due date for payment of GST is 20 days from the end of the month.

  7. G Sankara narayanan says:

    very important information lucidly written. Thanks

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