GST Invoicing: All You Need to Know

1. GST Invoicing: All You Need to Know

2.  As a major tax reform in India, the Goods and Services Tax (GST) unifies a variety of indirect taxes – service tax, custom duty, central excise duty, state-level value added tax (VAT) and surcharges.  But GST is a consumption-based tax which is levied on transaction value. The enterprises have to pay tax on the value of individual transactions.  This includes an array of sales expenses including packaging and commission. Also, they have to focus extensively on invoicing as an integral part of purchase and sales transactions. Currently, there are a lot of doubts and confusions about GST invoicing.  So, let’s try to understand the various changes and aspects of invoicing under GST.

3. Understanding Important Aspects of GST Invoicing Types of Invoices  The GST Act allows enterprises to choose from various types of invoices according to nature of individual transactions.  According to nature of a transaction, a business may issue a tax invoice, debit note, credit note, bill of supply, supplementary tax invoice, advance receipt, or refund voucher. For instance, an enterprise has to issue a tax invoice while supplying any taxable good or service.  Likewise, it needs to issue a supplementary tax invoice if any deficiencies are found in the tax invoice issued by it. Hence, each enterprise needs to decide the type of invoice to be issued according to individual transactions.

4. Invoice Format  The GST Act does not require enterprises to issue invoices in any specific or prescribed format. Hence, each enterprise can design and issue custom GST invoices according to its transactions.  But the GST Act makes it mandatory for businesses to include a number of fields in the GST invoices – alphanumeric invoice number; name, address, and GSTIN of the issuer; date of issue; name, address, and GSTIN or UN of the recipient; delivery address; HSN Code of goods or Service Accounting Code for services; description of goods/services; quantity of goods; value of goods/services; GST rate, amount of GST; and supplier’s signature or digital signature.

5. Number of Copies  Each enterprise needs to generate three copies of each GST invoice while supplying goods.  The original copy of the invoice must be marked as “Original for recipient” and issued to the recipient of goods. The duplicate copy of the invoice needs to be marked as “Duplicate for transporter and issued to the transporter.  The triplicate copy of the invoice must be marked as “Triplicate for supplier” and retained by the supplier.  However, the taxpayer can use an option associated with his GSTIN to generate an invoice reference number which can be used by the transporter without requiring a paper invoice during transportation.

6. Time Limit for Issuing GST Invoices  Each enterprise has to issue GST invoice within specific days from the date of supplying the good or services.  It needs to issue the GST invoice while supplying the goods. In case of normal supply, the enterprise needs to issues the invoice on the date of removal or delivery. But it has to issue GST invoice while issuing the account statement of payment in case on continuous supply.  On the other hand, a business has to issue the GST invoice within 30 days from supplying of services.  The time limit for issuing GST invoice for services is extended to 45 days for banks and non-banking financial companies (NBFCs).

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