GST Invoice Guide - Format & Rules

When we talk about the execution of a transaction, invoicing plays a crucial role. An invoice is issued to the buyer by the supplier on every sale/ purchase. An invoice generally contains serial wise details of the various products sold i.e. quantity, description, name, etc, along with the details of the supplier. The invoice also contains name and address of the purchaser, tax charged or discount given. If sale is made on some terms, they also need to be mentioned in the invoice.

Invoices prove to be important for making entries in the books of accounts, both for seller as well as buyer, as invoices are said to be the primary documents on which other documents are prepared which include balance sheet, P/L account, trial balance, etc. even at the time of audit, the invoices are rechecked to be sure about the accuracy and this process is termed as vouching.

It is only on the basis of tax invoices that a purchaser can claim input tax credit. Rules for invoicing to be followed under GST have been notified by the government along with the invoice template (GST INV-01) which covers elements like GST tax rates, supplier details, etc. At loanbaba, you will get complete goods and services tax invoice guide.

Format of GST Invoice

In the basis of rule 5 of GST Invoice Rules, 2016 issued by the Central Government there are two types of invoices that can be issued, namely, bill of supply and tax invoice.

Time Limit to Issue Invoice under GST Rules

The time limit for issuance of revised bills, tax invoices, credit notes and debit notes has been defined by the GST Model Law.

Time limit for issuance of tax invoice for supply of goods

  1. Normal case
  2. Continuous supply of services

Supply of Goods in Normal Instances

Every registered taxable person involved in supply of taxable goods need to issue a tax invoice to the buyer which includes value of goods, quantity and description of goods. It will also contain the tax charged and other particulars described as below:

  • A) Where movement of goods is involved in supply, which is done on or before the removal of goods from the location of the supplier for supply to the buyer.

For example: In Mumbai, A is dealing in Radio sets. He needs to make a delivery of 10 radio sets to another dealer B in Kolkata. In this case, movement of goods is involved; hence, the invoice will be issued to the buyer on or before the dispatch of goods.

  • B) Where supply doesn’t involve movement of goods, which is done on or before the date of delivery of goods to the buyer.

For example: X Ltd purchases a video conferencing device, the installation of which in office premises is agreed upon afterwards. Here, the device is not moved to the buyer’s location and hence the invoice can be issued at the time of installation/ delivery of the goods.

In Case of Continuous Supply of Goods

The cases which include successive payments or successive statement of accounts, the invoice can be issued before or at the time of issuance of each statement.

Time Limit for Issuance of Debit Note and Credit Note

  1. On or before 30th September following the financial year of supply of goods or,
  2. The date of filing the return,

Whichever is earlier

Under section 30(2), it needs to be noted that the annual return needs to be filed on or before 31st December following the concerned financial year.

How to Revise Invoices Issued Already

As per section 28(3a) of revised GST Model Law, a registered taxpayer may issue revised tax invoices within one month from the issuance of registration certificate. It needs to be issued for invoices which are issued already during the period of date of registration and date of issuance of certificate of registration.

What is Bill of Supply?

A tax invoice is issued in order to charge tax and pass credit. In GST there are some special situations where the supplier cannot charge tax and therefore, there is no point of issuing tax invoice and alternatively, bills of supply are issued.

What is Credit Note and Debit Note?

In the cases of issuance of tax invoice where the GST amount or taxable value in the invoice falls shorter or exceeds than actual GST amount or taxable value, a credit or debit note can be issued by the supplier.

Supplementary tax invoice: It is an invoice which is issued by a taxable person in the cases where some/ any deficiency/ (ies) are/ is found in the invoice already issued by him. Debit note is also an example of supplementary invoice.