GST Registration

Invoicing Under GST: Everything you Need to Know

Almost every kind of indirect tax in India requires the preparation of an invoice. This is because not only it serves as a proof of a sale but also provides information on every other form of supply such as exchange, transfer, barter, etc.

With the implementation of GST however, the way invoices are created will be changed. According to the GST regime two types of invoices have to be issued either before or on the occurrence of a particular event within a certain period. These invoices are tax invoice, and bill of supply.

Tax Invoice

If you are a registered taxable person under the GST regime who is supplying goods or services, then you are required to issue a tax invoice for all the supplies involved.

Bill of Supply

If you are supplying goods or services that are exempted from GST, or if have opted for the composition levy scheme (provided under the GST regime itself) then you will need to issue a bill or supply rather than the tax invoice for the supplies. Plus, you can’t use the bill of supply to claim input tax credits.

What are the Differences Between a Tax Invoice and a Bill of Supply?

  • A tax invoice is to be issued to a taxable supplier liable under GST regime, who is supplying good and/or services that are taxable. A bill of supply, on the other hand, is to be issued by the supplier of goods and/or service that are exempt from GST, or in case the supplier is a composition taxpayer.
  • You can claim Input Tax Credits with a tax invoice, but not with a bill of supply.
  • Reverse charge (in which a tax paid is by the recipient of goods/services instead of the supplier) in allowed for the registered GST sellers. However, taxpayers under the composition scheme have to pay the taxes themselves.

How to Issue a Tax Invoice?

If you are a registered taxable person under the GST scheme, then you need to issue a tax invoice either before or at the time of when you have to:

  • Remove goods, in case the supply includes movement of goods.
  • Issue several statement accounts in succession.
  • Deliver goods to the receiver, in case the supply doesn’t include the movement of goods.

You have to issue a tax invoice in accordance with the following timelines:

  • Within 30 days under normal circumstances.
  • Within 30 days from the date of due payment, if there is a continuous supply of services and the due date is ascertainable.
  • Within 30 days from the date of payment, if there is a continuous supply of services and the due date is unascertainable.
  • At the time of cessation, if there is a continuous supply of services and the contract expires/made to nullify.
  • Within 45 days from the supply of service, if you are a bank on NBFC.

The following are the details to be included in your tax invoice:

  • Your name, address, and the GSTIN number or registration number.
  • A consecutive serial number that doesn’t contain any special symbols (alphabets and numbers only) and is different for every financial year. For instance, for the financial year 2017-2018, you can use 2017NameOfCompany.
  • Issuing date.
  • Description of the goods and services involved.
  • The total value of the goods and services.
  • Rate of tax levied (CGST, SGST, or IGST)
  • Place of supply along with State name, if it’s an interstate

If you are an exporter then you need to include some additional information in the invoice, which is:

  • Name of the country along with the address you are exporting the goods to
  • The statement “Supply meant for export on payment of IGST” or “Supply meant for export under bond without payment of IGST”, depending on the case
  • Your name and address
  • Number and date of ARE-1, which is the application for removal of goods for export

If you are a goods transport agency then the invoice issued by you should have the following information:

  • Gross weight of the shipment
  • Name of the consignee and consignor
  • Registration number of the carriage used for transportation
  • GSTIN of the taxpayer
  • Details of the shipment, such as the address of origin and destination

How many copies of tax invoices have to be issued?

If you are supplying goods then you are required to create three copies of the invoice:

  • Original Invoice: This is the original invoice marked as “ORIGINAL FOR RECIPIENT” which you have to issue to the buyer of the goods.
  • Duplicate Copy: This is the second copy of the original invoice marked as “DUPLICATE FOR TRANSPORTER” which you have to issue to the delivery boy (the one transporting the goods). However, if you have an invoice reference number then the delivery boy needn’t carry the duplicate invoice.
  • Triplicate Copy: This is the final copy of the tax invoice (marked “TRIPLICATE FOR SUPPLIER”) that you have to keep with yourself for record purposes.

In case you are supplying services then you need to create just two copies of the invoices:

  • Original Copy: This one is marked “ORIGINAL FOR RECIPIENT”.
  • Triplicate Copy: This one is marked “TRIPLICATE FOR SUPPLIER”.

How to Issue a Bill of Supply?

If you have opted for the GST composition scheme then instead of tax invoice you have to issue a bill of supply, as you are not allowed to collect the tax.

The bill of supply should include the following:

  • Your name, address, and GSTIN
  • Date of issue.
  • A consecutive serial number that doesn’t contain any special symbols (alphabets and numbers only) and is different for every financial year. For instance, for the financial year 2017-2018 you can use 2017NameOfCompany.
  • Description of the goods and services involved.
  • The total value of the goods and services.
  • HSN code (in case of goods) or Accounting code (in case of services)
  • Your Signature (either digital or non-digital).

Also, if the total value of the goods supplied is less than Rs. 100 then you are not required to issue a bill of supply, unless the receiver insists.