Invoicing Under GST

Invoicing within complex business environments goes far beyond simple paperwork. It serves as a critical finance function for accuracy, compliance, and financial transparency across vast business operations.

Further, after introducing the Goods and Services Tax (GST), registered businesses must issue GST invoices, also known as GST bills. Businesses should be careful while generating invoices as every transaction enters into books of accounts through this activity. 

In this article, you can learn everything about invoicing under GST, including what it is, who should issue it, mandatory fields, types of invoices, revised invoices, and invoicing under special cases.

Key takeaways-

• GST invoices must include invoice number, date, customer and supplier GSTIN, place of supply, and detailed item descriptions.
• For unregistered recipients with invoice value over Rs.50,000, additional recipient details are mandatory.
• CGST Act prescribes specific timelines for issuing invoices, revised invoices, debit notes, and credit notes.
• Bill of supply is issued when GST cannot be charged, such as for exempt goods or composition scheme suppliers.
• Invoice-cum-bill of supply is allowed for mixed taxable and exempt supplies to unregistered customers.

What is a GST invoice?

In simple words, a GST invoice or a GST bill is a list of goods sent or services provided, along with the amount due for payment. It is an official document that a GST-registered enterprise issues on sale of goods or services including all the mandatory particulars prescribed by the CGST Rules. GST invoice acts as a legal evidence of a transaction. It thereby enables the buyer to claim Input Tax Credit (ITC) and ensure tax compliance. 

Invoice also records the time of supply, crucial for determining taxation under GST.

Who should issue GST Invoice?

All businesses, irrespective of scale, if registered under the CGST Act, must issue a GST-law compliant invoice upon the sale of good and/or services.

Also, you should receive GST invoices from your vendors to claim the Input Tax credit (ITC).

What are the mandatory fields a GST Invoice should have?

A tax invoice is generally issued to charge the tax and pass on the ITC. A GST Invoice must have the following mandatory fields-

1. Invoice number
2. Invoice date
3. Customer name
4. Shipping and billing address
5. Customer and taxpayer’s GSTIN (if registered)**
6. Place of supply
7. HSN code/ SAC code
8. Item details i.e. description, quantity (number), unit (meter, kg etc.)
9. Total value
10. Taxable value and discounts
11. GST rate and amount of taxes i.e. CGST/ SGST/ IGST
12. Whether GST is payable on reverse charge basis
13. Signature of the supplier

**If the recipient is not registered AND the value is more than Rs. 50,000 then the invoice should carry:

• Name and address of the recipient
• Address of delivery
• State name and state code

Here is a sample invoice for your reference:

By when should you issue invoices?

The GST Act has defined time limit to issue GST tax invoice, revised GST bill, debit note, and credit note. Following are the due dates for issuing an invoice:

What are other types of invoices?

a. Bill of supply

A bill of supply is similar to a GST invoice except for that bill of supply does not contain any tax amount as the seller cannot charge GST to the buyer. A bill of supply is issued in cases where tax cannot be charged:

• Registered person is selling exempted goods/services,
• Registered person has opted for composition scheme

Invoice-cum-bill of supply

As per Notification No. 45/2017 – Central Tax dated 13th October 2017 If a registered person is supplying taxable as well as exempted goods/ services to an unregistered person, then he can issue a single “invoice-cum-bill of supply” for all such supplies.

b. Aggregate invoice

If the value of multiple invoices is less than Rs. 200 and the buyer are unregistered, the seller can issue an aggregate or bulk invoice for the multiple invoices on a daily basis.

For example, you may have issued 3 invoices in a day of Rs.80, Rs.90 and Rs. 120. In such a case, you can issue a single invoice, totalling Rs.290, to be called an aggregate invoice.

c. Reverse charge invoice

A taxpayer liable to pay tax under Reverse Charge Mechanism (RCM) has to issue an invoice for goods or services or both received by him. The receiver shall mention the fact that the tax is paid under RCM. In addition, they have to issue a payment voucher while making payment to the supplier.

d. Debit and credit note

A debit note is issued by the seller when the amount payable by the buyer to seller increases:

1. Tax invoice has a lower taxable value than the amount that should have been charged
2. Tax invoice has a lower tax value than the amount that should have been charged

A credit note is issued by the seller when the value of invoice decreases:

1. Tax invoice has a higher taxable value than the amount that should have been charged
2. Tax invoice has a higher tax value than the amount that should have been charged
3. Buyer refunds the goods to the supplier
4. Services are found to be deficient

Can you revise invoices issued before GST?

Yes, you can revise invoices issued before GST. Under the GST regime, all the dealers must apply for provisional registration before getting the permanent registration certificate.

Below image explains the process of issuing a revised invoice:

This applies to all the invoices issued between the date of implementation of GST and the date your registration certificate has been issued.

As a dealer, you must issue a revised invoice against the invoices already issued. The revised invoice has to be issued within 1 month from the date of issue of the registration certificate.

GST invoicing under special cases?

In some cases, like banking, passenger transport, etc., the government has provided relaxation on the invoice format issued by the supplier.

How many copies of invoices should be issued?

• For goods – 3 copies
• For services – 2 copies

In 2020, the department implemented e-invoicing where B2B invoices shall be authenticated by GSTN. This move has impacted the invoicing process of the businesses.