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Introduction
An invoice is a legal demand for payment. An invoice includes the details of the seller, the buyer, the product or service sold and the total payment to be made.
With the introduction of GST, it is mandated by all sellers and service providers to issue a GST invoice to buyers. A GST Invoice contains the GSTIN number of the registered taxpayer. A GST Invoice is necessary to apply for Input Tax Credit.
"GST Invoice" or "tax invoice" means the tax invoice alluded to in section 31 of the CGST Act, 2017. The objective of this chapter is to issue an invoice or a bill of supply with each supply of goods or services. It is not mandatory for an invoice to be provided only by the individual delivering goods or services. The GST Act specifies that any registered individual who purchases goods or services from an unregistered person shall issue a payment voucher as well as a tax invoice.
The type of invoice to be given depends on the type of licenced individual producing the products. For example, if a registered person makes or collects materials (from unregistered persons), a tax invoice must be given by the registered individual. However, if the registered person trades only with exempted supplies or uses the composition scheme (composition dealer) then the registered person must give a bill of supply instead of the invoice. The invoice shall include the definition, quantity and value & other specified details (in the case of the supply of goods) and the description and value & other prescribed details (in case of supply of services). An invoice or a shipping notice shall not be given if the amount of the supply is less than Rs. 200/-subject to defined conditions.
What is the importance of GST invoice?
GST Invoice is the main document that contains evidence of delivery and is vital to the use of input tax credits. It not only contains documentation of the availability of goods or services, but is also a necessary record for the purchaser to make use of the Input Tax Credit (ITC). A licenced person cannot use an input tax credit until he has a tax invoice or a debit note in his hands. The GST is payable at the time of sale. Invoice is a significant measure of supply period.
To make it simple, the time of delivery of goods or services shall be the date of issue of the invoice or receipt of payment, whichever is earlier. However, a special method for the paying of taxes has been prescribed for registered individuals (other than dealers of composition) who supply products. Such groups of individuals (suppliers of products other than composition dealers) need to pay GST only at the point of issuance of the invoice, unaware of whether they collect payment.
When is a GST invoice issued?
If you are a GST registered business, you need to provide GST-compliant invoices to your clients for sale of goods and/or services. Similarly, your GST registered vendors will provide GST-compliant purchase invoices to you.
The timeline to issue the invoice would depend on the type of the supply, whether it is a supply of goods or services. Before or at the time of the removal of goods (where the supply includes the transportation of goods) or the distribution or rendering available to the purchaser, the licenced individual who supplies taxable goods shall issue a tax invoice containing the description, quantity and value of the goods, the tax paid thereon and such other information as is prescribed in the Invoice Guidelines.
Format and Content of a GST Invoice
There is no prescribed format for a GST Invoice, however, there is a list of mandatory information to be contained in it:
(a) Name, address and GSTIN of the supplier
(b) A consecutive serial number, in one or multiple series, containing alphabets, numerals, special characters like hyphen/dash/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) 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
(p) Signature or digital signature of the supplier or his authorized representative
What is a Bill of Supply?
A Bill of Supply is issued by the supplier to the buyer. It can be considered an alternative for a GST Invoice. It should contain the following information:
(a) Name, address and GSTIN of the supplier
(b) A consecutive serial number, in one or multiple series, containing alphabets, numerals, special characters like hyphen/dash/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 of services
(f) Description of goods or services
(g) Total value of supply of goods or services or both
(h) Signature or digital signature of the supplier or his authorized representative sued based on the distance remaining to be traveled.
GST Invoices for Services
A registered individual rendering taxable services shall, before or after the service has been provided, but within a specified time, issue a tax invoice containing the definition, amount, tax paid thereon and any other details as is prescribed in the Invoice Laws.
In the case of goods, an invoice must be given before or at the time of sale. However, in the case of services, the invoice must be given before or after the availability of services. If the invoice is given after the delivery of the service, it must be rendered within a specified duration of 30 days from the date of delivery of the service, in compliance with the laws of the invoice.
FAQs
1. I've already registered with the GST Portal. Do I need to log into the eWay Portal again?
Yes. Every enrolled person who needs to produce a GST E-way bill is expected to register on the E-way billing portal using their GSTIN. When GSTIN is entered, the device sends an OTP to its registered mobile phone, registered with the GST Portal, and after verification, the system allows it to create its username and password for the E-way billing system. After creating the username and password of his/her choosing, he/she will proceed to make entries to generate the E-way bill.
2. Why should a transporter register on the E-way bill system?
There may be certain carriers who are not registered under the Goods and Services Tax Act, but those carriers may enable the transfer of goods to their clients. They need to sign up for the E-way billing site to get 15 digits Unique Transporter Id (TRANSIN) to create an E-way Bill.
3. How can an unregistered transporter get his Unique ID or Transporter ID?
Unregistered transporters can get their Unique ID or Transporter ID by registering on the EWB Portal.
4. Does one require an E-way Bill for all kinds of good transportation?
Yes, one needs an E-way Bill for movement of all goods over the value of Rs. 50,000. It is necessary to transport all items except those exempted under the Notification or Law. The transportation of handicrafts or goods for work-related purposes under defined circumstances requires an E-way bill even if the value of the consignment is less than fifty thousand rupees.
5. What kind of transports require an E-way bill?
An E-way Bill is needed for transportation of goods in all the below mentioned movements: Outward supply whether within the State or interstate, inward supply whether from within the State or from interstate including from an unregistered persons or for reasons other than supply.
6. Are E-way bills required to be issued for imports and exports as well? What has to be the shipping address in case of export supply type?
Since imports and exports are deemed to be interstate goods movements under the GST Act, the E-way bill must also be provided for these transactions. The importer will produce an E-way bill for imports. The exporter is responsible for producing an E-way bill for export supplies. For an export supply, the 'Bill To' Party shall be the URP or GSTIN of the SEZ Unit with the State as 'Other Country' and the forwarding address and the PIN code shall be the place (airport/shipping yard/border check post) from which the shipment travels out of the country.