GST Acts give immense importance to invoice and named it as tax invoice because it is one of the most important document on the basis of which tax credit is availed by the recipient of goods or services or both.
Various sections applicable to tax invoice, debit and credit note and procedure of issue thereof
|Section 31 of the CGST/SGST Act —||It deals with the subject of ‘Tax Invoice’. It also deals with various situations under which a tax invoice has to be issued Besides, it also makes provisions for issuing a Revised Invoice, Preparation of Documents for Receipt of Advances etc.|
|Section 33 of the CGST/SGST Act —||It provides that the amount of tax to be prominently indicated in tax invoice and other documents.|
|Section 34 of the CGST/SGST Act —||It deals with Credit and Debit Notes.|
1. Tax invoice [Section 31 of the CGST / SGST Act]
An “invoice” or “tax invoice” is a document issued to the addressee / recipient specifying, amongst other things, the description of taxable goods or services or both as well as value of taxable supply. “Invoice” or “tax Invoice” is usually issued after the completion of the supply of goods or services or both.
There is no format prescribed for the Tax Invoice. Only certain fields have been prescribed as mandatory fields. Further, invoices may be issued manually or electronically. Issuance of electronic invoices is not mandatory.
Time of issue of tax invoice for—
— supply of goods
— supply of services
have been separately dealt with under various sub-sections of section 31 and as such, these have been separately discussed hereunder:
(A) Time of issue of ‘Tax Invoice’ for ‘Supply of Goods’
(1) Registered person supplying taxable goods [Section 31(1)]
Tax invoice showing the description, quantity and value of goods, the lax charged thereon and such other particulars as may be prescribed shall be issued by the supplier of taxable goods as under—
(i) where the supply involves movement of goods — before or at the time of removal of goods for supply to the recipient; or
(ii) in any other case — before or at the time of delivery of goods or making available thereof to the recipient.
The Government may, on the recommendations of the Council, by notification, specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed. [Proviso to section 31(1)]
(2) Continuous Supply of Goods [Section 31(4)]
Where successive statements of accounts or successive payments arc involved—
— the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received
(3) Goods sent or taken on Approval for Sale or Return are removed before the Supply takes place [Section 31(7)]
The invoice shall be issued—
— before or at the time of supply
— 6 months from the date of removal,
whichever is earlier.
(A) R, a registered person sends goods to G on 10.9.2020 on approval or return basis. G gives his approval to the goods on 20.11.2020. In this case, the invoice should be issued on:
(i) 20.1 1.2020 (dale of approval is taken as the time of supply)
(ii) 9.3.2021 i.e. 6 months from the date of removal
whichever is earlier.
Therefore, the invoice should be issued on 20.11.2020.
(B) What will be the answer if the approval is given by G on 20.4.2021 instead of 20. 11.2020?
In this case 6 months from the date of removal ends on 9.3.2021 i.e. before the time of supply on 20.4.2021. Therefore, the invoice should be issued on 9.3.2021.
(B) Time of issue of ‘Tax Invoice’ for ‘Supply of Service’
(1) Registered Person supplying Taxable Services [Section 31(2)]
Tax invoice showing the disceptation, value, lax charged thereon and such other particulars as may be prescribed shall be issued by supplier of taxable services—
before or after the provision of service but within 30 days from the date of supply of service [45 days in case of an insurer or banking company or financial institution, including a non-banking financial company (NBFC)].
The Government may, on the recommendations of the Council, specify the categories of services in respect of which—
(a) Any other document issued in relation to the supply shall be deemed to be a tax invoice;
(b) Tax invoice may not be issued. [Proviso to section 31(2)]
(2) Continuous Supply of Services [Section 31(5)]
Tax invoice shall be issued,—
(a) where the due date of payment is ascertainable from the contract,— on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, — before or at the time when the supplier of service receives the payment;
(c) where the payment is linked to the completion of an event, — on or before the date of completion of that event.
Sanjay, a Chartered Accountant in practice enters into an agreement on 1.10.2020 with LG Ltd to provide consultancy services for a period of one year for a fee of Rs 6,00,000. The due date of payment is 10th of every month, the first payment becoming due on 10.11.2020. In this case, a invoice shall be issued on or before 10th of the every month starting from 10th November 2020.
In the above case, if the due date of payment is not ascertainable, the invoice will be raised at the time he receives the payment.
(3) Cessation of Supply of Services under a Contract before the Completion of Supply [Section 31(6)]
The invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply made before such cessation.
On 01.12.2020 R agrees to supply ‘Commercial Training and Coaching Services’ to G on daily basis for a period of three months. However, after 45 days, due to some unavoidable reasons, the aforesaid services could not be supplied by R.
In the above case, R shall be required to issue the invoice at the time when the supply ceases. Further, such invoice shall be issued to the extent of the supply made for 45 days only
(C) Consolidated Tax Invoice — If value of each supply is less than Rs. 200 [Section 31(3)(b) and Proviso to Rule 46]
Registered person may not issue tax invoice for each supply of goods or services if value of goods and services or both per invoice is less than Rs. 200 but can issue a consolidated tax invoice at close of each day [Section 31(3)(b)]
Registered person may issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies provided the following conditions are satisfied.
(a) the recipient is not a registered person;
(b) the recipient does not require such invoice.
Tax invoice shall have to be issued if any of the above conditions is not satisfied.
(D) Type of Tax Invoice under other Special Circumstances [Section 31(3)] [Read with Rule 53 of CCST Rules, 2017]
(1) Revised Invoices after first time Registration under CGST Act [Section31(3)(a)]
A registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued without collection of tax during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him.
Consolidated Revised Tax Invoices in certain cases
A registered person may issue a Consolidated Revised Tax Invoice in respect of all taxable supplies made to an unregistered recipient during such period.
However, in case of inter-State supplies, a consolidated Revised Tax Invoice cannot be
issued in respect of all unregistered recipients if the value of a supply exceeds Rs.
R started a business of dealing in computer parts on 1.12.2020. His turnover exceeded Rs. 20,00,000 on 15.2.2021 and he therefore becomes liable to get registration under GST. He applies for registration on 25.2.2021 and the certificate of registration is granted to him on 5.3.2021. This certificate shall be effective from 15.2.2021.
He may issue revised tax invoices in respect of all taxable supplies made during the period 15.2.2021 to 5.3.2021.
(2) Bill of Supply (instead of a Tax Invoice— in case of supply of Exempted Goods or Services or both or supply by a Composition Dealer [Section 31(3)(c)]
In this case, a registered person shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed.
Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than Rs. 200 subject to such conditions and in such manner as may be prescribed.
Note: Any tax invoice or any other similar document issued under any other Act for the time being in force in respect of any non-taxable supply shall be treated as bill of supply for the purposes of the Act.
(3) Receipt Voucher on receipt of Advance Payment [Section 31(3)(d)]
A registered person shall, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment.
Further, where at the time of receipt of advance—
(i) the rate of tax is not determinable—the tax shall be paid at the rate of 18%,
(ii) the nature of supply is not determinable—the same shall be treated as inter-State supply.
(4) Refund Voucher if no supply is made after issue of Receipt Voucher and no Supply and Tax Invoice is issued in pursuance thereof [Section 31(3)(e)]
The said registered person may issue to the person who had made the payment, a refund voucher against such payment.
(5) Recipient to issue (i) Invoice in case of Supply on Reverse Charge basis and (ii) Payment Voucher at the time of making Payment [Section 31(3)(f) & (g)]
A registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both.
Note: Section 9(4) relating to reverse charge in case registered person receives supply of goods or services from unregistered person has been deferred till 30.6.2020.
Further, as per section 31(3)(g), he shall issue a payment voucher at the time of making payment to the supplier.
Summarised Chart of Type of Invoices
|Revised Invoice||Bill of
|issued by supplier of goods and services||The registered person may issue a consolidate tax invoice at the end of the day instead of tax invoice of each supply if value of each supply is less than Rs. 200||issued against the bill already issued without collection of tax during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him||issued (instead of a tax invoice) –
in case of supply of exempted goods or service or both
supply by a composition dealer
|issued on receipt of advance payment||in case of reverse charge, the recipient of the goods and services issue the invoice||In case of reverse charge, the recipient of goods and services issues payment voucher at the time of making payment.|
2. Amount of tax to be indicated in tax invoice and other documents [Section 33]
Where any supply is made for a consideration, every person who is liable to pay tax for such supply shall prominently indicate in all documents relating to assessment, tax invoice and other like documents, the amount of tax which shall form part of the price at which such supply is made.
Contents of Tax Invoice under CGST Act.
There is no format prescribed for an invoice under CGST Act. However, rule 46 makes it mandatory for an invoice to have the following fields (only applicable field are to be filled) –
|a.||. Name, address and GSTIN of the supplier.|
|b.||A consecutive serial number (not exceeding 16 characters, in one or multiple series, containing alphabets or numerals or special characters – hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year).|
|c.||Date of its issue.|
|d.||If recipient is registered – Name, address and GSTIN or UIN of the recipient.|
|e.||If recipient is unregistered and value of taxable supply is Rs. 50,000 or more – Name and address of the recipient and the address of delivery, along with the name of the State and its code.|
|f.||If recipient is unregistered and value of taxable supply is less than Rs. 50,000 – Name and address of the recipient and the address of delivery, along with the name of the State and its code (if the recipient requests that such details be recorded in the tax invoice).|
|g.||Harmonised System of Nomenclature (HSN) code for goods or .|
|h.||Description of goods or services.|
|i.||Quantity in case of goods and unit or Unique Quantity Code thereof.|
|j.||Total value of supply of goods or services or both.|
|k.||Taxable value of the supply of goods or services or both taking into account discount or abatement, if any.|
|L.||Rate of tax (CGST, SGST, IGST, UTGST or GST cess).|
|m.||Amount of tax charged in respect of taxable goods or services (CGST, SGST, IGST, UTGST or GST cess).|
|m.||Place of supply along with the name of the State, in the case of a supply in the course of inter-State trade or commerce.|
|o.||Address of delivery where the same is different from the place of supply.|
|p.||Whether the tax is payable on reverse charge basis.|
|q.||Signature or digital signature of the supplier or his authorised representative.|
3. Issue of Credit and Debit Notes [Section 34 of the CGST Act, 2017]
(1) Issue of Credit Note [Section 34(1) & (2)]
The registered person who has supplied goods or services or both may issue a Credit Note containing such particulars as may be prescribed to the recipient, in following situation:
(i) where the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or
(ii) where the goods supplied are returned by the recipient, or
(iii) where goods or services or both supplied are found to be deficient.
Further, as per section 34(2), he, shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than
(i) September following the end of the financial year in which such supply was made, or
(ii) the date of furnishing of the relevant annual return,
whichever is earlier,
and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
(2) Issue of Debit Note [Section 34(3) & (4)]
The registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note containing such particulars as may be prescribed—
Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply.
Further, he shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may be prescribed.
Explanation.—For the purposes of this Act, the expression “debit note” shall include a supplementary invoice.