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July 17, 2020

Issuing GST Invoice? Know all about Invoice provisions under GST

by Rubina Dsouza in GST

Issuing GST Invoice? Know all about Invoice provisions under GST

Introduction

An invoice is basically a bill of the list of goods sent or services provided, along with the amount due for payment. It is a commercial instrument issued by the supplier to the recipient.

What is the importance of an invoice?

  1. Evidences of supply of goods or services
  2. A registered person cannot avail input tax credit unless he is in possession of a tax invoice or a debit note.
  3. Invoice is an important indicator of the time of supply.

When a tax invoice or a bill of supply should be issued by a registered person?

For Supply of Goods

A registered person supplying taxable goods shall issue a tax invoice,

  1. before or at the time of removal of goods (for movable goods)
  2. before or at the time of delivery of goods or when it is made available to the recipient (for immovable goods)

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For Supply of Services

Invoices should be issued within 30 days from the date of supply of services

Can a registered person issue a revised invoice?

1.A registered person may, within 1 month from the date of issuance of 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 certificate of registration to him.

2. A person who becomes liable for registration has to apply for registration within 30 days of becoming liable for registration. When such an application is made within the time period and registration is granted, the effective date of registration is the date on which the person became liable for registration.

3. Thus there would be a time lag between the date of grant of certificate of registration and the effective date of registration.

4. For supplies made by such person during this period, a revised invoice can be issued, so that ITC can be availed by the recipient on such supplies.

5. Let us refer to the below mentioned example of Mr ABC to understand the same:-

i. Date from which Mr ABC became liable for registration – 01/01/2020

ii. Date of Application of Registration – 15/01/2020 (within 30 days)

iii. Date when registration was granted – 22/01/2020

iv. Date from which registration is applicable – 01/01/2020

v. Revised invoice can be issued for supplies made by ABC for the period of – 01/01/2020 to 22/01/2020

What documents are to be issued for advance payments?

  1. Whenever a registered person receives an advance payment w.r.t any supply of goods, services or both, he has to issue a receipt voucher or any other document, containing such particulars as prescribed, evidencing receipt of such payment.
  2. Where any such receipt voucher is issued, but subsequently no supply is made and no tax invoice issued, the registered person who has received the advance payment can issue a refund voucher against such payment.

What documents are to be issued by a person liable to pay tax under the reverse charge mechanism (RCM)?

  1. A registered person liable to pay tax under RCM has to issue an invoice in respect of goods or service or both received by him.
  2. Such a registered person in respect of such supplies also has to issue a payment voucher at the time of making payment to the supplier.

How are Invoices to be issued in case of continuous supply?

Continuous supply ofSituationInvoice to be issued on or before
Goodssuccessive statements of accounts or successive payments are involvedthe time of each of the statements is issued or each of the payments are received.
Servicesdue date of payment is ascertainable from the contractthe due date of payment
Servicesdue date of payment is not ascertainable from the contractthe time when the supplier receives the payment
Servicespayment is linked to the completion of an eventthe date of completion of that event

What is the due date of issuing an invoice, where supply of service ceases under a contract before completion of supply?

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 made before such cessation.

When is an invoice to be issued when sale is on approval basis?

The invoice w.r.t goods sent on approval basis has to be issued at the earliest of:

  1. Before or at the time of supply
  2. 6 months from the date of removal of goods from factory/godown etc

What is a Credit Note?

  1. In cases where tax invoice has been issued for a supply and subsequently it is found that the value or tax charged in that invoice is more than what is actually payable or where the recipient has returned the goods, the supplier can issue a credit note to the recipient.
  2. A registered person who issues such a credit note has to declare details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made or date of furnishing of the relevant annual return whichever is earlier.
  3. The tax liability of the registered person will be adjusted in accordance with the credit note issued
  4. 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.

What is a Debit Note?

  1. In cases where tax invoice has been issued for a supply and subsequently it is found that the value or tax charged in that invoice is less than what is actually payable, the supplier can issue a debit note to the recipient.
  2. Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.

Manner of issuing invoice

In case of supply of goods, the invoice shall be prepared in triplicate,

  1. the original copy being marked as ORIGINAL FOR RECIPIENT
  2. the duplicate copy being marked as DUPLICATE FOR TRANSPORTER
  3. the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

In case of supply of services, the invoice shall be prepared in duplicate:-

  1. the original copy being marked as ORIGINAL FOR RECIPIENT
  2. the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

Tax Invoice in special cases

SupplierTax Invoice
Input Service Distributor (ISD) is an office of a banking company or a financial institution (including a NBFC)a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the prescribed information
Insurer, banking company or a financial institution, (including a NBFC)a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the prescribed information
Goods transport agency (GTA) supplying services in relation to transportation of goods by road in a goods carriagetax invoice or any other document in lieu thereof, by whatever name called, containing
1. gross weight of the consignment
2. name of the consignor and consignee
3. registration number of the carriage in which the goods are transported
4. details of goods transported
5. details of place of origin and destination
6. GSTIN of the person liable for paying tax whether as consignor, consignee or GTA
Person supplying passenger transportation servicetax invoice shall include 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

Can goods be transported without an invoice?

In the following cases it is permissible for the consignor to issue a delivery challan in lieu of invoice at the time of removal of goods:

  1. supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known
  2. transportation of goods for job work
  3. transportation of goods for reasons other than by way of supply
  4. such other supplies as may be notified by the Board.

How is a delivery challan to be issued?

The delivery challan shall be prepared in triplicate, in case of supply of goods, in the following manner:

  1. the original copy being marked as ORIGINAL FOR CONSIGNEE
  2. the duplicate copy being marked as DUPLICATE FOR TRANSPORTER
  3. the triplicate copy being marked as TRIPLICATE FOR CONSIGNER

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

  1. the supplier shall issue the complete invoice before dispatch of the first consignment
  2. the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice
  3. each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice
  4. the original copy of the invoice shall be sent along with the last consignment.

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