Mandatory fields in GST Invoicing

Mandatory fields in GST Invoicing

What is the GST Invoice?

If you are a GST-registered business, you are probably familiar with a GST invoice. However, for all the customers, here is a quick brief.  

A GST-compliance purchase invoice contains the details of the parties involved in the mentioned transaction and lists all goods and services sold, with their prices. This bill also displays the percentage of discounts and taxes charged on each item, besides other details.


Do all businesses need to issue GST invoices?

A GST invoice must be issued without fail by businesses that hold a GST registration. Other enterprises, however, do not need to issue these particular invoices.


Mandatory fields in GST Invoice

Here is a list of particulars that must be present in a GST tax invoice specified under Rule 54 of the CGST Act of 2017.
  1. Name, GSTIN, and address of the supplier
  2. Invoice number 
  3. Date of issuance
  4. Invoice type
  5. Shipping and billing address
  6. Name of the customer
  7. GSTIN of the customer, if registered
  8. Details of products and services provided, including description, quantity, etc.
  9. SAC code or HSN code
  10. Rate of CGST, IGST, UTGST, and SGST charged 
  11. Total tax amount and discounts, if any
  12. Reverse charge
  13. Signature of the invoice issuer

GST Tax Invoice Rules

When following the above guidelines regarding invoice contents, issuers need to consider specific rules that specify the “what” and “how” of these details.


GST invoice serial number rules

Following are the mandates that issuers need to follow as per Rule 46 (b).
  1. The invoice numbers must be sequential or consecutive.
  2. They must be unique for a financial year, containing an alphanumeric combination.
  3. A serial number must not exceed 16 characters.
  4. GST should be split into CGST, SGST, and IGST. It must not be charged as a whole.
  5. In the case of any transactions made outside the issuer’s state, a separate tax called IGST has to be charged. On the other hand, SGST and CGST should be charged against sales within the same state.

GST invoice signature rules

The CGST rules make the issuer's signature one of the mandatory fields in a GST invoice. Specifications of a valid signature are as follows.
  1. The bill can be signed by hand or digitally, provided it is affixed as per the mandates of the Information Technology Act, 2000. 
  2. The supplier or their authorized representative must sign the GST invoice bill.
As per section 116 (2), their ‘authorized representative’ can be a company secretary, a practising advocate, a chartered accountant, a retired officer of the Commercial Tax Department, or a regular employee appearing on the supplier’s behalf.

GST Invoice Payment Rules

Another mandate under the CGST Act concerns a scenario where a GST-registered individual makes purchases from a seller who is not registered. There can be 2 cases here.
  1. If the registered individual buys from an unregistered entity, the former must issue a tax invoice.
  2. If the registered individual receives supplies exempted from GST, they need to issue a bill of supply instead of an invoice bill.
Now, you might be wondering that it might get difficult to always issue an invoice following such extensive guidelines right upon purchase every time. 

To ease this process, the Indian government has also provided outlines regarding the time of issue of invoices under GST.


When to issue a GST invoice?

The time limits vary depending on the type of supply. Here is a brief guide.

For goods

  1. Normal supply: The GST invoice bill must be issued on or before the purchased item’s removal. Under Section 2 (96) of the principal Act, removal is defined as directly collected by a recipient or dispatched by the supplier for delivery. 
  2. Continuous supply: Here, the date of issue of invoice under GST must be on or before receiving payment or the generation of the account statement.

For services

  1. General case: The invoice under GST must be resolved within 30 days of rendering such services.
  2. Financial services: For services provided by banks, NBFCs, and other financial institutions, the last date of issue of invoice under GST is the 45th day from the date of service supply.
That was all about the essential rules and regulations regarding tax invoices. Now, this is not the only type of invoice in practice. 


What are other types of invoices under GST?

Here is a list of the other types of GST invoices besides a tax invoice.

Bill of Supply

The only difference between a bill of supply and a tax invoice is that a 0% or no GST is charged in the former. Therefore, this type of invoice can be issued in 2 cases.
  1. When a GST-registered supplier has chosen the composition scheme.
  2. When a GST-registered supplier is dealing in exempted services and goods.
As a result, the recipient does not have the provision to claim an input tax credit based on this document.

Also, a registered entity can issue an all-encompassing invoice-cum-bill of supply as per the Notification No. 45/2017 of Central Tax if it deals in both exempt and taxable services/goods.

Aggregate Invoice

If a seller issues multiple invoices to an unregistered buyer, each less than Rs.200, they can issue a single invoice, summing up all the amounts. This is called a bulk or aggregate invoice.

Debit and Credit Note

Such commercial documents are issued when there is any discrepancy found in a previously issued tax invoice for a product or service. 
A debit note is issued when any of these two conditions arise.
  1. The formerly issued tax invoice displays a lower taxable value than the correct amount.
  2. The tax charge in this tax invoice is lower than the actual value.
  3. On the other hand, a credit note is issued for the opposite reasons.
  4. The taxable amount of tax charged in the invoice is higher than the correct figures.
  5. There is a discrepancy in services or products provided, and the buyer returns them and asks for a refund. 
Besides the above types of invoices in GST, several other documents and vouchers relating to such transactions, depending on several conditions.


Revising invoices issued before GST

There can be several instances of getting a wrong GST invoice bill issued. As a solution, there is a provision for revising such tax invoices before. 

All sellers need to apply for provisional registration before getting the permanent certificate. Any tax invoice issued from the date of GST implementation till the date on which a permanent registration certificate is issued must have a revised invoice under GST issued against them. This must be done within one month from the date of issue of the registration certificate.

This revised tax invoice under GST must have “Revised Invoice” mentioned on it, along with all the mandatory details of a tax invoice.


How many copies of invoices should a supplier issue?

Since proof of transaction should remain with all parties involved, a specific number of invoice copies are issued depending on the type of supply.

1. For Goods

The dealer must produce three copies of the GST invoice bill issued.
  1. Original Copy: Received by the buyer
  2. Duplicate Copy: Received by individuals delivering the products from the supplier’s end to the recipient’s end
  3. Triplicate Copy: Must be kept with the dealer

2. For Services

In the case of services, the issuer needs to arrange two copies of the invoice.
  1. Original Copy: Sent to the buyer
  2. Duplicate Copy: Remains with the supplier for later reference.
There you go! These are the relevant details regarding a GST invoice bill. If you are a registered dealer, ensure to issue such documents to avail of Input Tax Credit (ITC). If you are not GST-registered yet, consider getting a certificate to help your business benefit from such provisions.





Created & Posted by (Ramesh Kumar Gupta)

Senior Accounts Manager at TAXAJ

 

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