The government has clarified rules of invoicing under GST along with a template of invoice (GST INV-01) covering particulars like supplier’s details, GST tax rates etc. As per the rules, the invoice has to be issued within 30 days of rendering the service and in case of banks and NBFCs, it has to be issued within 45 days. Let us understand these in detail.
Invoicing in the current tax regime
Service Tax Invoice
In the current tax regime, Service tax invoice shows details of the service provider, registration ID, description of service, rate of Service Tax, abatement(if any), CESS namely Krishi Kalyan Cess@ 0.5% and Swachh Bharat Cess@ 0.5% and other particulars. A sample invoice is shown below:
Invoicing under GST
In the GST regime, two types of invoices (Supply of Services) will be issued:
1. Tax invoice
2. Bill of supply
1. Tax Invoice
When a registered taxable person provides taxable services, a tax invoice is issued. Based on the rules regarding details required in a tax invoice, a sample tax invoice has been shown below.
2. 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 service provider 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.
Cases where a registered service provider needs to issue a bill of supply:
- Rendering of exempted services
- Service provider is paying tax under composition scheme
Is issue of the bill of supply mandatory in all cases?
If the value of the goods or services supplied is less than INR 10, the supplier may not issue a bill of supply. In such case, however, a consolidated bill of supply has to be prepared at the close of each day in respect of all such supplies.
Time limit for issue of Invoice (Supply of Service)
- In normal cases, the tax invoice (for services) is to be issued within 30 days from the date of supply of service.
- In the case of continuous supply of services, invoice is to be issued within 30 days from the date when each event specified in the contract, which requires the recipient to make any payment to the supplier of services, is completed.
- In case of NBFC, bank or financial institution, invoice can be issued within 45 days from the date of supply of services.
How many copies of Tax Invoices are to be issued?
When services are provided, the service provider is required to issue two copies of the invoice– Original and Duplicate.
Original invoice: When a buyer makes the purchase he gets the first copy of the invoice, marked as ‘Original for recipient’.
The serial number of invoices issued during a tax period shall be furnished electronically through the Common Portal in FORM GSTR-1.
Duplicate copy: This copy is retained by the service provider for his own record.
Learn about how to revise an already issued invoice in our next article.