Invoicing and billing FAQs

An invoice and a bill are commercial documents issued by the seller to the buyer showing details about the sale transaction such as the description of goods, the amount payable, tax, etc. Some of the frequently asked questions about billing and invoicing are discussed below:

What is a tax invoice under GST?

Under GST, all registered taxpayers must issue an invoice for the supply of goods or services. This document issued by the seller to the buyer for the sale of goods is called a tax invoice.

When should an invoice be raised?

A supplier registered under GST should raise a GST invoice for the sale of goods or supply of services if the value of such supply exceeds Rs.200. In case of a supply of services, the invoice shall be issued before or after providing the service but not more than 30 days from the service date.

Is there a specified format for invoices under GST?

No, there is no specified format. But, Rule 46 of the CGST Rules specify the contents of an invoice. Refer here to understand the contents of a GST invoice. 

What happens if the invoice is not raised within 30 days?

The taxpayer won’t claim Input Tax Credit (ITC) if the invoice is not raised within 30 days of the sale of goods. Only banks and financial institutions can raise invoices within 45 days from the supply of services.

Is a taxpayer required to raise an invoice for advance received?

No, a taxpayer is required to raise a receipt voucher to the person paying in advance. The receipt voucher should contain details of the amount of advance, description of goods, tax rate, etc. He should then calculate the tax liability on such advance and make the same payment while filing the monthly returns.

How to amend an invoice?

It can be amended by issuing a revised invoice or by the issue of a debit note or a credit note. The same should be reported in the GSTR-1 of the current tax period.

How many copies of invoices should be issued?

• In case of goods- 3 copies shall be issued, original for the recipient, duplicate for transporter and triplicate for the supplier.
• In case of services- 2 copies shall be issued, original for the recipient and duplicate for the supplier.

What are the uses of an invoice?

Invoices serve as proof of transaction and are used to request payments from the customer. Some of the uses of an invoice are:
1. It helps to keep track of sales. 
2. It helps in inventory management. 
3. It is useful for financial reporting and taxation. 
4. It is used to forecast sales.

What are the important components of an invoice?

Below are the important contents of an invoice:
1. Name and communication address of the supplier and customer
2. Invoice date and invoice number
3. Description of goods sold
4. Taxes applicable and tax rate
5. Value of supply
6. Quantity and rate
7. Taxable value

Is a handwritten GST number on an invoice allowed?

Yes, Rule 46 and Rule 48 of CGST Rules do not say that GSTIN should be pre-printed on the invoice.

What is e-invoicing?

e-Invoicing is a method of raising invoices in which the GSTN authenticates all B2B invoices for further use on the GST portal. A unique invoice registration number is issued against each invoice. 

To whom is e-invoicing applicable?

e-Invoicing was implemented in a phased manner in India. 
1. Businesses with a turnover exceeding Rs.500 crore- 1st October 2020
2. Businesses with a turnover exceeding Rs.100 crore- 1st January 2021
3. Businesses with a turnover exceeding Rs.50 crore- 1st April 2021

Is e-invoicing applicable to reverse charge mechanism (RCM) transactions?

Yes, it is applicable to RCM transactions as well.

What is a bill?

Bills are issued by the seller to the buyer, usually for cash transactions. They contain limited details such as the amount payable for sale, taxes, etc. but do not contain customer details. Example: Bills are issued at restaurants, supermarkets, car servicing firms, etc. 

What are the functions of a bill?

Below are some of the functions of a bill:
1. It serves as a reminder for payments to be made against goods purchased.
2. It is issued before payment is made.
3. The buyer uses it for recording a purchase transaction.

Are invoices and bills the same?

The seller issues an invoice and a bill to the buyer as proof of business transaction. The seller of goods uses the word ‘invoice’, whereas the buyer records the same as “bill” against which payments are to be made.

What are the differences between an invoice and a bill?

An invoice is a legal document issued to its customers to sell goods or supply services. Whereas the bill is a generic term used for documents containing information about amounts owed by a customer to the vendor. Refer to this page for understanding more differences between the two documents.

Is a composition dealer required to issue a self invoice if goods are purchased from unregistered dealers?

Yes, he is required to issue a self invoice as he is required to pay GST. However, he cannot claim ITC on the same.

Are unregistered dealers required to issue tax invoices?

A registered person buying goods from an unregistered person must issue a payment voucher and a tax invoice for such a purchase. The responsibility of paying tax lies with the buyer under the reverse charge mechanism.

Is GST charged on the entire credit card bill?

No, charging GST on the entire credit card bill will double taxation. GST is charged only on the interest and commission amount charged by the banks for using credit card facilities.