CHAPTER XIII

Tax Invoice and other such instruments in GST

Introduction

Generally speaking, an invoice is a commercial instrument issued by a
seller to a buyer. It identifies both the trading parties and lists,
describes, and quantifies the items sold, shows the date of shipment and
mode of transport, prices and discounts, if any, and delivery and payment
terms.

In certain cases, (especially when it is signed by the seller or seller’s
agent), an invoice serves as a demand for payment and becomes a document of
title when paid in full. Types of invoice include commercial invoice,
consular invoice, customs invoice, and proforma invoice. It is also called
a bill of sale or contract of sale.

Invoice under GST

Under the GST regime, an “invoice” or “tax invoice” means the tax invoice
referred to in section 31 of the CGST Act,
2017. This section mandates issuance of
invoice or a bill of supply for every supply of goods or services. It is
not necessary that only a person suGenerally speaking, an invoice is a
commercial instrument parties and lists, describes, and quantifies the
items sold, shows the date of shipment and mode of transport, prices and
discounts, if any, and delivery and payment terms. In certain cases,
(especially when it is signed by the seller or seller’s agent), an invoice
serves as a demand for payment and becomes a document of title when paid
in full. Types of invoice include commercial invoice, consular invoice,
customs invoice, and proforma invoice. It Invoice under GST Under the GST
regime, an “invoice” or “tax invoice” means the tax invoice referred to in
section 31 of the CGST Act, 2017. This
section mandates issuance of invoice or a bill of supply for every supply
of goods or services. It is not necessary that only a person supplying
goods or services need to issue invoice. The GST law mandates that any
registered person buying goods or services from an unregistered person
needs to issue a payment voucher as well as a tax invoice. The type of
invoice to be issued depends upon the category of registered person making
the supply. For example, if a registered person is making or receiving
supplies (from unregistered persons), then a tax invoice needs to be issued
by such registered person. However, if a registered person is dealing only
in exempted supplies or is availing of composition scheme (composition
dealer), then such a registered person needs to issue a bill of supply in
lieu of invoice. The invoice should contain description, quantity and value
& such other prescribed particulars (in case of supply of goods) and the
description and value & such other prescribed particulars (in case of
supply of services). An invoice or a bill of supply need not be issued if
the value of the supply is less than Rs. 200/- subject to specified
conditions.

Importance of tax invoice under GST

Under GST a tax invoice is an important document. It not only evidences
supply of goods or services, but is also an essential document for the
recipient to avail Input Tax Credit (ITC). A registered person cannot avail
input tax credit unless he is in possession of a tax invoice or a debit
note.

GST is chargeable at the time of supply. Invoice is an important indicator
of the time of supply. Broadly speaking, the time of supply of goods or
services is the date of issuance of invoice or receipt of payment whichever
is earlier. However, a special procedure for payment of tax has been
prescribed for registered persons (other than composition dealers)
supplying goods. Such category of persons (suppliers of goods other than
composition dealers) need to pay GST only at the time of issue of invoice
irrespective of when they receive payment.

Thus the importance of invoice under GST cannot be over emphasised. Suffice
it to say, the tax invoice is the primary document evidencing the supply
and vital for availing input tax credit.

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

Goods

The time for issuing invoice would depend on the nature of supply viz
whether it is a supply of goods or services. A registered person supplying
taxable goods shall, before or at the time of removal of goods (where
supply involves movement of goods) or delivery or making available thereof
to the recipient, issue a tax invoice showing the description, quantity and
value of goods, the tax charged thereon and such other particulars has been
prescribed in the Invoice Rules.

The Government may, on the recommendations of the Council, by notification,
specify the categories of goods or supplies in respect of which a tax
invoice shall be issued, within such time and in such manner as may be
prescribed.

Contents of invoice

There is no format prescribed for an invoice, however,
Invoice rules makes it mandatory for an invoice to have
following fields (only applicable field are to be filled):

a) name, address and GSTIN of the supplier;

b) a consecutive serial number, in one or multiple series,
containing alphabets or numerals or special characters hyphen or dash and
slash symbolised as “-” and “/” re- spectively, and any combination
thereof, unique for a financial year;

c) date of its issue;

d) name, address and GSTIN or UIN, if registered, of the
recipient;

e) name and address of the recipient and the address of delivery, along
with the name of State and its code, if such recipient is unregistered
and where the value of taxable supply is fifty thousand rupees or more;

f ) HSN code of goods or Accounting Code of services;

g) description of goods or services;

h) quantity in case of goods and unit or Unique Quantity
Code thereof;

i) total value of supply of goods or services or both;

j) taxable value of supply of goods or services or both taking into
account discount or abatement, if any;

k) rate of tax (central tax, State tax, integrated tax, Union territory
tax or cess);

l) amount of tax charged in respect of taxable goods or services (central
tax, State tax, integrated tax, Union territory tax or cess);

m) place of supply along with the name of State, in case of
a supply in the course of inter-State trade or commerce;

n) address of delivery where the same is different from the
place of supply;

o) whether the tax is payable on reverse charge basis; and

p) signature or digital signature of the supplier or his authorized
representative

Contents of Bill of Supply

A bill of supply shall be issued by the supplier containing
the following details:-

a) name, address and GSTIN of the supplier;

b) a consecutive serial number, in one or multiple series,
containing alphabets or numerals or special characters
-hyphen or dash and slash symbolised as “-” and “/”respectively, and any combination thereof, unique for a
financial year;

c) date of its issue

d) name, address and GSTIN or UIN, if registered, of the
recipient;

e) HSN Code of goods or Accounting Code for services;

f ) description of goods or services or both;

g) value of supply of goods or services or both taking into
account discount or abatement, if any; and

h) signature or digital signature of the supplier or his authorized representative

Services

A registered person supplying taxable services shall, before or after the
provision of service but within a prescribed period, issue a tax invoice,
showing the description, value, tax charged thereon and such other
particulars as has been prescribed in the Invoice Rules.

The Government may, on the recommendations of the Council, by notification
and subject to such conditions as may be mentioned therein, specify the
categories of services in respect of which––

a) any other document issued in relation to the supply
shall be deemed to be a tax invoice; or

b) tax invoice may not be issued.

Thus it can be seen that in case of goods, an invoice has to be issued
before or at the time of supply. In case of services, however, invoice has
to be issued before or after provision of services. If the invoice is
issued after provision of service, it has to be done within the specified
period of 30 days from the date of supply of service, as per invoice rules.

Revised Invoice

A registered person may, within one month from the date of issuance of
certificate of registration and in such manner as has been prescribed in
the Invoice Rules, 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. This
provision is necessary as 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. Thus there would be a time
lag between the date of grant of certificate of registration and the
effective date of registration. For supplies made by such person during
this intervening period, the law enables issuance of a revised invoice, so
that ITC can be availed by the recipient on such supplies.

Receipt Voucher/ Refund voucher on receipt of advance payment

Whenever a registered person receives an advance payment with respect to
any supply of goods or services or both, he has to issue a receipt voucher
or any other document, containing such particulars as has been prescribed
in the Invoice Rules, evidencing receipt of such payment.

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.

A receipt voucher needs to contain the following particulars:

a) name, address and GSTIN of the supplier;

b) a consecutive serial number containing alphabets or numerals or
special characters -hyphen or dash and slash
symbolised as “-” and “/”respectively, and any combination thereof, unique
for a financial year;

c) date of its issue;

d) name, address and GSTIN or UIN, if registered, of the
recipient;

e) description of goods or services;

f) amount of advance taken;

g) rate of tax (central tax, State tax, integrated tax, Union
territory tax or cess);

h) amount of tax charged in respect of taxable goods or
services (central tax, State tax, integrated tax, Union territory tax or
cess);

i) place of supply along with the name of State and its
code, in case of a supply in the course of inter-State trade or commerce;

j)whether the tax is payable on reverse charge basis; and

k) signature or digital signature of the supplier or his authorized representative.

It has also been provided in the Invoice Rules that if at the time of
receipt of advance,

i. the rate of tax is not determinable; the tax may be
paid @18%;

ii. the nature of supply is not determinable, the same
shall be treated as inter-State supply.

Invoice and payment voucher by a person liable to pay tax under reverse charge

A registered person liable to pay tax under reverse charge (both for
supplies on which tax is payable under reverse charge mechanism and
supplies received from unregistered persons) has to issue an invoice in
respect of goods or service or both received by him. 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.

Invoice in case of continuous supply of goods

In case of continuous supply of goods, where successive statements of
accounts or successive payments are involved, the invoice shall be issued
before or at the time each such statement is issued or, as the case may be,
each such payment is received.

Invoice in case of continuous supply of services

In case of continuous supply of services, where,

a) the due date of payment is ascertainable from the con-
tract; the invoice shall be issued on or before the due
date of payment;

b) the due date of payment is not ascertainable from the
contract; the invoice shall be issued before or at the
time when the supplier of service receives the payment;

c)the payment is linked to the completion of an event;
the invoice shall be issued on or before the date of completion of that event.

Issue of invoice in case, 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.

Sale on approval basis

Where the goods being sent or taken on approval for sale or
return are removed before the supply takes place, the invoice
shall be issued before or at the time of supply or six months
from the date of removal, whichever is earlier.

Amount of tax to be indicated in invoice

Where any supply is made for a consideration, every person
who is liable to pay tax for such supply has to prominently
indicate in all documents relating to assessment, tax invoice
and other like documents, the amount of tax which shall
form part of the price at which such supply is made.

Credit and Debit Notes

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/chargeable or where the recipient has returned the goods,
the supplier can issue a credit note to the recipient. 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. The tax liability of the registered person will be
adjusted in accordance with the credit note issued, however 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.

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/chargeable, the supplier can issue a debit note to the
recipient.

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.

A revised tax invoice and credit or debit note has to contain the following
particulars –

a) the word “Revised Invoice”, wherever applicable, indicated prominently;

b) name, address and GSTIN of the supplier;

c) nature of the document;

d) a consecutive serial number containing alphabets or numerals or special characters -hyphen or dash and slash
symbolised as “-” and “/”respectively, and any combination thereof, unique for a financial year;

e) date of issue of the document;

f ) name, address and GSTIN or UIN, if registered, of the
recipient;

g) name and address of the recipient and the address of
delivery, along with the name of State and its code, if
such recipient is unregistered;

h) serial number and date of the corresponding tax invoice
or, as the case may be, bill of supply;

i) value of taxable supply of goods or services, rate of tax
and the amount of the tax credited or, as the case may
be, debited to the recipient; and

j) signature or digital signature of the supplier or his au-
thorized representative.

Manner of issuing invoice

The invoice shall be prepared in triplicate, in case of supply
of goods, in the following manner:–

a) the original copy being marked as ORIGINAL FOR
RECIPIENT;

b) the duplicate copy being marked as DUPLICATE
FOR TRANSPORTER; and

c) the triplicate copy being marked as TRIPLICATE
FOR SUPPLIER.

The invoice shall be prepared in duplicate, in case of supply
of services, in the following manner: –

a) the original copy being marked as ORIGINAL FOR
RECIPIENT; and

b) the duplicate copy being marked as DUPLICATE
FOR SUPPLIER.

The serial number of invoices issued during a tax period
shall be furnished electronically through the Common
Portal in FORM GSTR-1.

Tax invoice in Special Cases

An ISD invoice or, as the case may be, an ISD credit note
issued by an Input Service Distributor shall contain the
following details:

a) name, address and GSTIN of the Input Service Distributor;

b) a consecutive serial number containing alphabets or
numerals or special characters hyphen or dash and
slash symbolised as , “-”, “/”, respectively, and any com-
bination thereof, unique for a financial year;

c) date of its issue;

d) name, address and GSTIN of the recipient to whom
the credit is distributed;

e) amount of the credit distributed; and

f ) signature or digital signature of the Input Service Distributor or his authorized representative.

Tax Invoice in special cases

Where the Input Service Distributor is an
office of a banking company or a financial institution, including a non-
banking financial company, a tax invoice shall include any document in lieu
thereof, by whatever name called, whether or not serially numbered but
containing the prescribed information.

Where the supplier of taxable service is an insurer or a banking company or
a financial institution, including a non-banking financial company, the
said supplier shall issue a tax invoice or any other document in lieu
thereof, by whatever name called, whether or not serially numbered, and
whether or not containing the address of the recipient of taxable service
but containing other information as prescribed under rule 1 of Invoice
Rules.

Where the supplier of taxable service is a goods transport agency supplying
services in relation to transportation of goods by road in a goods
carriage, the said supplier shall issue a tax invoice or any other document
in lieu thereof, by whatever name called, containing the gross weight of
the consignment, name of the consignor and the consignee, registration
number of goods carriage in which the goods are transported, details of
goods transported, details of place of origin and destination, GSTIN of the
person liable for paying tax whether as consignor, consignee or goods
transport agency, and also containing other information as prescribed under
rule 1 of Invoice Rules.

Where the supplier of taxable service is a goods transportation service, a
tax 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
under rule 1 of Invoice Rules.

Transportation of goods 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:

a) supply of liquid gas where the quantity at the time of
removal from the place of business of the supplier is
not known,

b) transportation of goods for job work,

c) transportation of goods for reasons other than by way
of supply, or

d) such other supplies as may be notified by the Board.

The delivery challan, serially numbered not exceeding
16 characters, in one or multiple series, shall contain the
following details:

1. date and number of the delivery challan,

2. name, address and GSTIN or UIN of the consignee, if registered,

3. name, address and GSTIN of the consigner, if registerd

4. HSN code and description of goods,

5. quantity (provisional, where the exact quantity being supplied is not known),

6. taxable-value,

7. tax rate and tax amount – central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee,

8. place of supply, in case of inter-State movement, and

9. signature.

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

a) the original copy being marked as ORIGINAL FOR CONSIGNEE;

b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and

c)the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.

Where goods are being transported on a delivery challan
in lieu of invoice, the same shall be declared in FORM
[WAYBILL].

Where the goods being transported are for the purpose
of supply to the recipient but the tax invoice could not be
issued at the time of removal of goods for the purpose of
supply, the supplier shall issue a tax invoice after delivery of
goods.

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

a) the supplier shall issue the complete invoice before dis-
patch of the first consignment;

b) the supplier shall issue a delivery challan for each of
the subsequent consignments, giving reference of the
invoice;

c)each consignment shall be accompanied by copies of
the corresponding delivery challan along with a duly
certified copy of the invoice; and

d) the original copy of the invoice shall be sent along with
the last consignment.