Before or at the time of moving goods for supply to the recipient, a registered person must issue a tax invoice. GST invoices for services can be issued before, during, or even after the time of supply. Furthermore, the e-Invoicing system is being phased in, requiring certain additional mandatory fields.
Mandatory Fields in a GST Invoice
The contents of invoices are addressed in Rule 46 of the CGST Rules. The information under the following 16 headings must be clearly stated on the tax invoice:
- Consecutively generated Tax invoice numbers up to 16 characters with a unique number for every financial year.
- Name, address and GSTIN of the supplier
- Date of issue
- Name, Address and GSTIN of the recipient if the buyer is registered.
- For non-registered buyers and the value is more than Rs.50,000 then the invoice should carry:
- Name and address of the recipient.
- Address of delivery.
- State name and state code.
- HSN code of goods or SAC for services.
- Description of the goods/services.
- Quantity of goods in number and unit in UQC (metre, kg etc.)
- The total value of supply of goods/services.
- The taxable value of supply after adjusting any discount.
- The applicable rate of GST (Rates of CGST, SGST, IGST, UTGST and Cess clearly mentioned).
- Amount of tax (With the breakup of amounts of CGST, SGST, IGST, UTGST and Cess).
- Place of supply and name of destination state for inter-state sales.
- Delivery address if it is different from the place of supply.
- Whether GST is payable on a reverse charge basis.
- Signature of the supplier or his authorised representative.
HSN Code reporting is as follows for businesses (1st April 2021):
- Turnover above Rs.5 crore must use a 6-digit HSN code for all invoices
- Turnover less than or equal to Rs.5 crore must use a 4-digit HSN code for all the B2B invoices. However, this reporting is optional for B2C invoices.
GST Endorsement on Invoice for Exports
- Under GST, certain invoices require endorsement or mention on the invoice. Exports of goods and services, as well as supplies to SEZ units or developers for authorised operations, are among the cases:
- Payment of taxes
- Without paying taxes under a bond or a LUT
Depending on the condition stated above, there are two types of endorsement text:
On payment of an integrated tax, supply to an SEZ unit or SEZ developer for authorised operations.
- Without payment of integrated tax, supplies meant for export/supplies to SEZ units or SEZ developers for authorised operations under bond or letter of undertaking.
Copies of GST Invoices
Businesses must keep copies of all invoices under the GST Law. The specifics of this are provided below.
Invoices for Goods and Services
The invoice must be printed three times. They’ll be clearly labelled:
- Original copy for the recipient’s use
- To use the transporter, make a duplicate copy.
- For the supplier’s use, make a triplicate copy.
Invoices for Services Provided
The invoice must be prepared twice and clearly labelled as follows:
- Original copy for the recipient’s use
- A duplicate copy for the supplier’s use
What are other types of invoices?
- Bill of Supply
A bill of supply is similar to a GST invoice, except that it does not include any tax information because the seller cannot charge GST to the buyer. When tax cannot be charged, a bill of supply is issued:
The registered person is selling exempted goods or services and has chosen the composition scheme.
- Aggregate Invoice
If the total value of multiple invoices is less than Rs. 200 and the buyer is not registered, the seller can issue a daily aggregate or bulk invoice for the invoices.
For example, you may have issued three Rs. 80, Rs. 90, and Rs. 120 invoices in one day. In this case, you can create an aggregate invoice by issuing a single invoice totalling Rs.290.
- Debit and credit note
When the amount due from the buyer to the seller increases, the seller issues a debit note:
- The taxable value of the tax invoice is less than the amount that should have been charged.
- The tax value on the tax invoice is less than the amount that should have been charged.
When the invoice value decreases, the seller issues a credit note:
- The taxable value of the tax invoice is higher than the amount that should have been charged.
- The tax value on the tax invoice is higher than the amount that should have been charged.
- The buyer refunds the goods to the supplier.
- Services are found to be deficient.
- Invoice with Reverse Charge
A taxpayer who is subject to the Reverse Charge Mechanism (RCM) must issue an invoice for goods, services, or both that he has received. The fact that the tax is paid under RCM must be mentioned by the receiver. They must also issue a payment voucher to the supplier when making a payment.