GST invoicing

A GST invoice is the tax invoice issued under section 31 of the CGST Act for a taxable supply. Company Suggestion sets the invoice so the buyer can claim input tax credit and the supplier can report it in the return.

What is a GST tax invoice?

Section 31 requires a registered person to issue a tax invoice for a taxable supply of goods or services. The invoice is the proof of that supply, and it is the document on which the recipient claims input tax credit.

It names both parties, describes the supply, and states the taxable value and the tax. A bill of supply is a different document. It is used when the supply is exempt, and by a dealer who has opted for the composition scheme.

When must the invoice be issued?

The time depends on what is supplied.

Goods: before or at the time the goods are removed for delivery.
Services: before the supply, or within 30 days after it. An insurer, a bank or an NBFC has 45 days.
Continuous supply of goods: before or at each statement of account, or at each payment.
Continuous supply of services: on or before the due date in the contract, or when payment is received if no date is fixed, or on completion of the event the payment is linked to.

An advance against a service is recorded in a receipt voucher, and tax is paid when that advance is received. Tax on an advance against goods is not collected until the supply. If the advance is later refunded without a supply, a refund voucher is issued.

Which document replaces a tax invoice?

Four documents sit beside the tax invoice.

A bill of supply, for an exempt supply and for a composition dealer.
A credit note under section 34, when the tax charged was too high or the goods come back.
A debit note, when the tax charged was too low.
A revised invoice, within one month of the registration certificate, for supplies made from the effective date of registration until the certificate was issued.

Where aggregate turnover exceeded ₹5 crore in any financial year from 2017-18, a B2B invoice and an export invoice are reported to the Invoice Registration Portal before they are issued. The portal returns an invoice reference number. A composition dealer does not e-invoice.

What are the invoicing steps?

Company Suggestion sets the invoice in four steps.

The supply is classed as taxable, exempt, or under composition.
A tax invoice or a bill of supply is issued at the time section 31 requires.
Where e-invoicing applies, the IRN is taken before the invoice goes to the buyer.
The invoice is reported in GSTR-1.

Frequently asked questions

4 questions cover the rules that decide this registration.

What must a GST invoice show?

The supplier’s name, address and GSTIN, a consecutive serial number, the date, the recipient’s name and address, the recipient’s GSTIN if registered, the HSN or SAC, the description, quantity, taxable value, rate, tax amount, place of supply, and whether reverse charge applies.

When is e-invoicing required?

A registered person whose aggregate turnover exceeded ₹5 crore in any financial year from 2017-18 reports B2B invoices and export invoices to the Invoice Registration Portal and prints the IRN. A composition dealer is outside e-invoicing.

How many HSN digits are required?

Four digits when aggregate turnover in the preceding financial year is up to ₹5 crore, and six digits when it is above ₹5 crore.

Does a bill of supply give input tax credit?

No. A bill of supply is for an exempt supply and for a composition dealer. Input tax credit needs a tax invoice or a debit note.