Invoicing forms a crucial function when it comes to the execution of a transaction. On every sale/purchase an invoice is issued by the supplier i.e person making the sale. The invoice contains S.No, details of product such as product name, description, quantity, etc along with details of supplier, purchaser, tax charged and other particulars such as discounts, terms of sale etc.
Based on the same invoice the seller and buyer make entry in their books of accounts. When audit (link) is conducted, the invoices are rechecked for their accuracy(this process is called vouching) as invoices are considered as primary documents based on which other documents are prepared such as trial balance, profit and loss account and balance sheet.
Based on the tax invoices only purchaser can claim input credit.
The government has notified rules of invoicing under GST along with a template of invoice (GST INV-01) covering the elements such as supplier’s details, GST tax rates etc that need to be presented. In this section we will be covering all aspects of invoicing under GST.
Format of Invoice
Based on GST Invoice Rules (Rule 5), 2016 issued by the Central Government, two kinds of invoices can be issued under GST namely tax invoice and bill of supply.
Time Limit to Issue Invoice Under GST
The GST Model law has defined the time limit for issue of GST tax invoices, revised bills, debit notes and credit note. In normal case, the GST tax invoice has to be issued by a registered dealer on or before the time when goods are removed for supply (where supply involves movement) and on or before the time when delivery is received by the recipient (where movement of goods is not involved).
In case of supply of services the invoice has to be issued issued within 30 days(45 days in case of banks and NBFCs) of supply of services.
How to Revise Already Issued Invoices
As per the revised GST Model Law section 28(3a) revised tax invoices can be issued by a registered taxable person within one month from issuance of certificate of registration i.e. GST Registration. It will be issued against the invoice already issued during the period starting from the effective date of registration till the date of issuance of certificate of registration to him.
What is Bill of Supply?
Tax invoice is generally issued to charge the tax and pass on the credit. In GST there are some instances where the supplier is not allowed to charge any tax and hence a Tax invoice can’t be issued instead another document called Bill of Supply is issued.
What is Debit Note & Credit Note?
Where original tax invoice has been issued and taxable value/GST tax amount in the invoice exceeds/falls shorter than the actual taxable value/tax amount, in such cases the supplier can issue debit/credit note. Under this section we will cover the cases where debit notes/credit notes can be issued, the format, particulars to be included etc. We will also understand the difference between a revised invoice and a supplementary invoice.
Note: Supplementary tax invoice is issued by taxable person in case where any deficiency is found in a tax invoice already issued by a taxable person. Debit note is also considered as a supplementary invoice.