GST INVOICING AND RETURNS FILING| GST INVOICE RULES| WHAT IS GST INVOICE: ALL YOU NEED TO KNOW ABOUT GST INVOICE

INTRODUCTION 

The introduction of Goods and Services Tax (GST) in India was put forward by former Prime Minister Mr. Atal Bihari Vajpayee, and after various committee discussions, it was passed by the parliament on29th March 2017 with effect from 1st July 2017. GST was one of the most needed tax reforms in India. Prior to the introduction of GST, there existed a multiplicity of taxes with no uniformity among the states. With the advent of GST, numerous central and state-level taxes have been integrated into one. It supports the notion of one nation and one tax.

INVOICES 

In simple words, an invoice is nothing but a statement which is commercial in nature issued by the seller to the buyer. It includes details such as details of the trading parties, quantity of items of sold, price, date of purchase, amount of taxes levied, etc. However, Section 31 of the Central Goods and Services Act, 2017 defines the term tax invoice. It mandates that for every supply of goods and services, an issue of invoice of the bill of supply is necessary.

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Generally, the issuance of an invoice depends upon the category of the registered person making the supply. For instance, if a taxpayer registered under GST Lawmakers or received supplies from unregistered persons, such a registered person needs to issue a tax invoice. But if a registered person is engaged only in exempted supplies or has registered under section 10 of Central Goods and Services Act, 2017, then instead of tax invoice, such a person is to a Bill of supply. On the other hand, if a person buys goods or avails services from an unregistered person, then such a person needs to issue both a tax invoice and a payment voucher.

CONTENTS OF VARIOUS INVOICES

The following table gives a brief overview of the important items that constitute a bill of supply and an invoice-

  TAX INVOICE  BILL OF SUPPLY
There is no set format of an invoice, but certain rules make the inclusion of the following compulsory. They are as follows-  
Name,
GST Identification number, and address of the supplier;
A consecutive serial number unique for each financial year;
Date of the issue; If registered, then name, address, and GSTIN or Unique Identification Number of the recipient;
Name and address of the recipient  Code of goods based on Harmonised System of Nomenclature or Accounting Code for services;
Type of goods or services;
The gross value of supply of goods or services or both;
The assessable value of supply of goods or services or both taking into Consideration any kind of discount Rate of tax 
Place of supply  Address of delivery when it is different from the place of Supply;
If the tax is to be paid on reverse charge mechanism; A signature or a digital signature of the particular supplier or his agent, partner, or any other representative  
The bill of supply mainly includes-      
Name,
GST Identification number, and address of the supplier;
A consecutive serial number unique for each financial year;
Date of the issue; If registered, then name, address, and GSTIN or Unique Identification Number of the recipient;
Code of goods based on Harmonised System of Nomenclature or Accounting Code for services Type of goods or services value of supply of goods or services or both
A signature or digital signature of the supplier or his agent, partner, or any other representative








       

POINT OF TIME AND MANNER OF ISSUING INVOICES 

The invoice is issued at a particular time period. Such time differs according to the nature of the supply, i.e., whether the supply is the supply of goods or supply of services.

In case of a supply of goods- A tax invoice is issued by a person making the supply of taxable goods either before or at the time of removal of goods in case of movement of goods, and in other cases when goods are delivered or made available to the recipient. The invoice shall be prepared and issued in triplicate for the supply of goods. The original copy is for the recipient, the duplicate for the transporter, and the triplicate copy for the supplier.

In case of a supply of services- A tax invoice is issued by the person making the supply of taxable services either before or after the provision of service but within a prescribed period. The invoice shall be issued in a duplicate for the supply of services. The original copy is for the recipient, duplicate for the supplier.

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KINDS OF INVOICES 

The invoices can be of the following types –

Revised Invoice – A revised invoice can be issued by a registered person, in a period of one month from the date of issuance of a certificate of registration in such manner as prescribed in the Invoice Rules, against the invoice already issued during the period beginning with the effective date of registration till the receipt of a certificate of registration to him. This aids him for supplies made during the intervening period between the date of grant of certificate of registration and the effective date of registration., by enabling of issuance of a revised invoice, the recipient can avail ITC on such supplies.

Receipt Voucher – A registered person issues a receipt voucher whenever he receives an advance payment with respect to the supply of goods or services or both, containing relevant particulars that have been prescribed in the Invoice Rules, evidencing receipt of payment.

Receipt Voucher – Where any receipt voucher is issued, but for which no supply has been made, the registered person who has received the advance payment shall issue a refund voucher against such payment received.

Payment Voucher –A person who is liable to pay tax under reverse charge or who has received supplies from an unregistered person is required to issue an invoice for any goods or service or both received by him. He is also needed to issue a payment voucher at the time of making payment to the supplier.

Credit and Debit Notes

Credit note –there are cases where a tax invoice has been issued for the supply of either goods or services, and later on, it is discovered that the amount of value or tax charged in that invoice is greater than what is actually payable. A credit note is also issued by the supplier when goods have been returned by the recipient. For example- Mr. A has charged a sum of money which is more than the sum actually payable, in such a scenario, he will be liable to issue a credit note, and the details for the same are required to be disclosed in return for the month during which the said credit note was issued but it shall be not later than September following the end of the particular financial year in which such supply was made or date of furnishing of the relevant annual return whichever is earlier. According to recent notifications, a person may issue any number of credit notes.

Debit note-There are other cases where a tax invoice has been issued for the supply of either goods or services, and later on, it is discovered that the amount of value or tax charged in that invoice is less than what is actually payable. The registered person is required to disclose the details of the debit notes issued in the return for the month during which such debit note has been issued, and the tax liability shall be adjusted accordingly.

CONCLUSION 

Section 31 of the Central Goods and Services Act, 2017 makes the issuance of invoices compulsory for every supply made by the registered person. An invoice is deemed to be understood as a document which is issued by the supplier to the receiver for the goods sold or services provided. It provides various details such as the value of goods sold or services availed, the rate of tax applicable, description of goods, details such as the name, addresses of trading parties, etc. There exist various types of invoices such as revised invoices, refund vouchers, payment vouchers, receipt vouchers, etc. An invoice under the domain of GST law holds utmost significance. It is an evidence of the supply of goods or services. But another important function is that it helps the recipient to avail Input Tax Credit (ITC). In order for the registered person to claim Input Tax Credit, possession of a tax invoice is very important. It is a known fact that GST is based entirely on the concept of supply, and the issuance of the invoice is an evidence of a time when such supply was made. Primarily, the time of supply of goods or services or both is the date of issuance of tax invoice or receipt of payment, whichever is earlier. The registered persons other than those registered under section 10 of Central Goods and Services Act, 2017, i.e., composite dealers, need to pay GST at the time of issue of invoice irrespective of when they receive payment. However, the importance of invoices under GST cannot be overlooked. The tax invoice is an important document evidencing the supply made by the recipient and essential for availing input tax credit.

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.