What is an Invoice?

Tax Invoice

The provisions relating to Tax Invoices are provided under section 31 of the CGST Act 2017. A tax invoice shall be issued by a registered person supplying taxable goods or taxable services or both.

Time limit for issuance of invoice: [Sections 31(1), (2), (4) & (5) read with rule 47]

The time for issuing an invoice would depend on the nature of supply viz. whether it is a supply of goods or supply of services.

1. In case of taxable supply of goods:
   An Invoice shall be issued before or at the time of,
   • Removal of goods for supply to the recipient, where the supply involves movement of goods; or
   • Delivery of goods or making available thereof to the recipient, in any other case.
2. In case of continuous supply of goods:
   Where successive statements of accounts/successive payments are involved, the invoice shall be issued before/at the time each such statement is issued or each such payment is received.
3.  In case of taxable supply of services:
   a) Invoice shall be issued before or after the provision of service, but within a period of 30 days from the date of supply of service.
   b) 45 days in case of an insurer or banking company or financial institution, including a non-banking financial company (NBFC
   
   
4. In case of continuous supply of services:
   a) Where the due date of payment is ascertainable from the contract the invoice shall be issued on or before the due date of payment.
   b) Where due date of payment is not ascertainable from the contract the invoice shall be issued before or at the time when the supplier of service receives the payment.
   c) Where payment is linked to the completion of an event the invoice shall be issued on or before the date of completion of that event.

Where the supply of services ceases before its completion:

In a case where the supply of services ceases under a contract before the completion of the supply, 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.

How to prepare Tax invoice and Contents of tax invoice :

There is no format prescribed for an invoice, but rules make it mandatory for an invoice to have the following fields :

1. Name, address, and GSTIN of the supplier
2. A consecutive serial number not exceeding 16 characters, in one or multiple series, containing alphabets/numerals/special characters hyphen or dash and slash, and any combination thereof, unique for a FY
3. Date of its issue
4. If the recipient is registered: Name, address and GSTIN or UIN of recipient.
5. If the recipient is unregistered:

If recipient is  unregistered and value of supply is	Particulars of invoice
Rs. 50,000 or more	Name and address of  the  recipient and the address of  delivery,  along with the name of State and its code
less than Rs. 50,000	unregistered recipient  may  still request the aforesaid details to be recorded in the tax invoice

6. HSN code for goods or services
7. Description of goods or services
8. Quantity in case of goods and unit or Unique Quantity Code thereof
9. Total value of supply of goods or services or both
10. Taxable value of supply of goods or services or both taking into account           discount or abatement, if any
11. Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
12. Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess)
13. Place of supply along with the name of State, in case of a supply in the course of inter-state trade or commerce
14. Address of delivery where the same is different from the place of supply
15. Whether the tax is payable on a reverse charge basis
16. Signature or digital signature of the supplier or his authorized representative.
17. Quick Response code, having embedded Invoice Reference Number (IRN) in it, in case an e-invoice has been issued.

Number of HSN digits required on the tax invoice and a class of registered person not required to mention HSN

S. No.	Annual Turnover (AT) in the preceding FY	Number of Digits of HSN Code
1.	AT ≤ Rs. 5 crores	For B2B supply - 4 For B2C supply – 4 (optional)*
2.	AT > Rs. 5 crores	For B2B supply and B2C supply – 6

*As mentioned above, a registered person having aggregate turnover up to Rs. 5 crores in the previous financial year has been exempted from the requirement of mentioning the HSN Code in the manner specified in the above table in a tax invoice issued by him under the said rules in respect of supplies made to unregistered persons.

Manner of issuing the invoice:

1. In case of a taxable supply of goods, an invoice shall be prepared in Triplicate. The original copy is for the recipient, the duplicate is for the transporter & the triplicate copy is for the supplier’s record.

2. In case of taxable supply of services, an invoice shall be prepared in Duplicate. The Original copy is for the recipient, the duplicate is for supplier’s record.

Invoice in case of export of goods or services

In the case of the export of goods or services, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT/ SUPPLY TO SEZ UNIT/SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX” or “SUPPLY MEANT FOR EXPORT / SUPPLY TO SEZ UNIT/SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, as the case may be.

It is important to note that the particulars of an Export Invoice contain following details:

• Name and address of the recipient
• Address of delivery
• Name of the country of destination

E-Invoice (Electronic billing) under GST

E-invoicing statutory provisions:

According to Rule 48(4) of the CGST Rules, 2017, taxpayers are obligated to create an electronic invoice by inputting the designated details into FORM GST INV-01 on the Invoice Registration Portal (IRP) and acquire the Invoice Reference Number (IRN).

Registered individuals, with the exception of specified groups, whose aggregate turnover in any previous financial year from 2017-18 onward surpasses Rs. 5 crores, have been designated as the category of individuals obligated to create E-invoices for B2B supplies (supply of goods or services or both to a registered person) or for exports. At present, such designated individuals are not obliged to report B2C (business-to-consumer) invoices on the Invoice Registration Portal (IRP). However, the inclusion of B2C invoice reporting into e-invoicing will be implemented in a subsequent phase. Additionally, it's important to note that e-invoicing does not apply to invoices issued by Input Service Distributors (ISD).

In cases where e-invoicing is mandatory, invoices issued by the mentioned individuals in any manner other than that specified in rule 48(4) will not be considered valid invoices. Additionally, when e-invoicing is in effect, there is no requirement to provide invoice duplicates or triplicates.

E-invoicing is mandatory even if a notified individual issues an invoice for supplies made by them, for which the tax is payable under the reverse charge mechanism as per Section 9(3).

Phase wise summary of E-invoice applicability:

Phase	Applicable to taxpayers having an aggregate turnover of more than	Applicable date	Notification number
I	Rs 500 crore	01.10.2020	61/2020 – Central Tax and 70/2020 – Central Tax
II	Rs 100 crore	01.01.2021	88/2020 – Central Tax
III	Rs 50 crore	01.04.2021	5/2021 – Central Tax
IV	Rs 20 crore	01.04.2022	1/2022 – Central Tax
V	Rs 10 crore	01.10.2022	17/2022 – Central Tax
VI	Rs. 5 Crore	01.08.2023	10/2023-Central Tax

Cancellation of reported E-invoice

Electronic invoicing, commonly known as E-Invoicing or E-Invoice, is gaining prominence worldwide as governments take steps to combat tax evasion. This digital method of billing is being increasingly mandated by governments as a means to enhance tax compliance.

Whenever necessary, the seller has the option to cancel the IRN for an E-invoice that has already been reported by submitting a cancellation request on the Invoice Registration Portal (IRP) within the stipulated timeframe.

• Each invoice must be cancelled individually.
• There is no provision for modifying an already generated E-invoice.
• Once an IRN is cancelled the same invoice number cannot be reused to generate another invoice.
• Cancellations can be carried out within a 24-hour window.

It's important to note that while amendments and cancellations of E-invoices are allowed on the GST portal, any changes made will be reported to the proper officer in accordance with GST law.

Exemption from E-invoicing:

Electronic invoicing, commonly known as E-Invoicing or E-Invoice, is gaining prominence worldwide as governments take steps to combat tax evasion. This digital method of billing is being increasingly mandated by governments as a means to enhance tax compliance.

Exemption from E-invoicing:

The following entities are exempt from the mandatory requirement of e-invoicing:

1. Special Economic Zone units (not SEZ developers)
2. Insurer or banking company or financial institution including NBFC
3. GTA supplying services in relation to the transportation of goods by road in a goods carriage
4. Supplier of passenger transportation service
5. Person supplying services by way of admission to the exhibition of cinematograph films on multiplex screens.

Thus, above mentioned entities are not required to issue e-invoices even if their turnover exceeds Rs. 5 Crore in the preceding financial year from 2017-18 onwards.

Example: In this situation, Hushway Private Limited operates both an SEZ (Special Economic Zone) unit and a regular DTA (Domestic Tariff Area) unit, and they share the same PAN (Permanent Account Number). The combined total turnover of Hushway Private Limited, considering both GSTINs (Goods and Services Tax Identification Numbers), exceeds Rs. 5 crores.

However, it's important to note that the turnover of the DTA unit alone is Rs. 2 crores for the previous financial year.

As per the e-invoicing regulations, the SEZ unit is exempt from e-invoicing requirements. However, the DTA unit falls under the purview of e-invoicing because the aggregate annual turnover of the entire legal entity, which includes both SEZ and DTA units, exceeds Rs. 5 crores. E-invoicing applicability is determined based on the aggregate annual turnover of the entity under the common PAN, and in this case, it surpasses the threshold, making e-invoicing mandatory for the DTA unit.

Bill of Supply under GST

As per Section 31(3)(c) of CGST Act 2017, a registered individual providing exempted goods or services or both or a registered person who pays tax under the composition scheme must issue a bill of supply in lieu of a tax invoice. A person choosing the composition levy should include the statement "composition taxable person, not permitted to collect tax on supplies" prominently at the top of the bill of supply issued by them.

Details of Bill of Supply:

A registered individual who chooses the composition levy is not required to charge tax to the recipients for their outward supplies. Likewise, when a registered person provides exempted goods and/or services, there are no tax obligations involved. In such cases, recipients should not anticipate a Tax Invoice from these suppliers as they are not authorized to issue one.

As no tax is gathered from the recipient by a registered person opting for the composition levy or a registered person providing exempted goods and/or services, the Bill of Supply issued by these individuals does not include information regarding the tax rate and tax amount. Moreover, the value to be indicated in the Bill of Supply does not represent taxable value either.

Particulars of Bill of Supply:

1. Name, address, and GSTIN of the supplier
2. A sequential serial number which should not exceed 16 characters can be in one or more series. It may consist of letters, numbers, or special characters such as hyphens, dashes, slashes, or any combination thereof. This serial number should be unique for a given financial year.
3. Date of its issue
4. Name, address, and GSTIN or UIN, if registered, of the recipient
5. HSN Code for goods or services
6. Description of goods or services or both
7. Value of supply of goods or services or both taking into account discount/ abatement, if any
8. The signature or digital signature of the supplier or their authorized representative is mandatory. However, in cases where an electronic bill of supply is issued in compliance with the Information Technology Act, 2000, the requirement for the physical signature or digital signature is waived.

Example: Goyal Brothers a wholesaler of goods has chosen the composition levy as per the provisions of sections 10(1) and 10(2). They will provide a Bill of Supply to their purchasers for goods rather than a tax invoice.

Note: Any tax invoice or equivalent document issued under any other prevailing legislation for non-taxable supplies shall be regarded as a bill of supply under the Act.

Payment Voucher under GST

As per Section 31(3)(f) & (g) of CGST Act 2017, the recipient is responsible for paying taxes under the reverse charge mechanism when they receive supplies of goods, services, or both that are designated for reverse charge purposes under section 9(3). These supplies can come from either a registered or an unregistered supplier.

Particulars of Payment Voucher

1. Name, address, and GSTIN of the supplier if registered
2. A unique consecutive serial number for a financial year should not exceed 16 characters and it can consist of alphabets, numerals, or special characters such as hyphens, dashes, slashes, or any combination of these characters
3. Date of its issue
4. Name, address, and GSTIN or UIN, if registered, of the recipient
5. Description of goods or services in respect of which refund is made
6. Amount paid
7. Rate of tax (central tax, State tax, integrated tax, Union territory tax, or cess)
8. Amount of tax payable in respect of such goods or services (central tax, State tax, integrated tax, Union territory tax or cess)
9. Place of supply along with the name of State and its code, in case of a supply in the course of inter-state trade or commerce
10. Signature/digital signature of supplier/his authorized representative

Receipt Voucher under GST

As per Section 31(3)(d) of CGST Act 2017, when a registered individual receives an advance payment for the supply of goods or services, they are required to generate a Receipt Voucher to formally document the receipt of this payment.

Particulars of Receipt Voucher

1. Name, address, and GSTIN of the supplier
2. A unique consecutive serial number for a financial year should not exceed 16 characters and it can consist of alphabets, numerals, or special characters such as hyphens, dashes, slashes, or any combination of these characters
3. Date of its issue
4. Name, address and GSTIN or UIN, if registered, of the recipient
5. Description of goods or services
6. Amount of advance taken
7. Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
8. Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess)
9. Place of supply along with the name of State and its code, in case of a supply in the course of inter-state trade or commerce
10. Whether the tax is payable on reverse charge basis
11. Signature/digital signature of the supplier/his authorized representative

Where at the time of receipt of advance rate of tax and/or nature of supply is not determinable

Where at the time of receipt of advance
i.            Rate of Tax is not determinable	Tax shall be paid at the rate of 18%
ii.            Nature of supply is not determinable	Same shall be treated as inter-State supply

Revised Invoice under GST

As per Section 31(3)(a) of CGST Act 2017, any individual or entity that holds a valid registration, granted prior to the issuance of their registration certificate has the authority to issue Revised Tax Invoices. These revised invoices should be generated for transactions that occurred within that period and they are intended to replace the previously issued invoices.

Revised Tax Invoices must be generated and prominently labeled as "Revised Invoice" within one month from the date of receiving the registration certificate.

This provision is essential because an individual or entity becoming liable for registration must submit their registration application within 30 days of becoming eligible for registration. When such an application is submitted within the specified timeframe and registration is approved, the effective registration date is the same as the date when the individual or entity became liable for registration.

Hence, there may be a time gap between the certificate of registration's issuance date and the effective registration date. To facilitate the claiming of Input Tax Credit (ITC) by the recipient for supplies made by such an individual or entity during this interim period, the law permits the issuance of revised invoices.

Example: Beta Private Ltd. initiated its goods supply business in Delhi on April 1st. However, it crossed the threshold limit for registration on September 3rd, making it liable for registration. The company submitted its registration application on September 29th and received the registration certificate on October 5th. As it applied for registration within the 30-day window of becoming liable, its effective registration date is September 3rd. Beta Private Ltd. has the authority to issue Revised Tax Invoices for taxable supplies made between September 3rd and October 5th, and this can be done on or before November 5th.

FAQ’s

Q-1: What do you mean by Tax Invoice in GST?

Ans: Tax Invoice meaning, an invoice or a GST bill is a list of goods sent or services provided, along with the amount due for payment.

Q-2: Who should issue GST Invoice?

Ans: Tax Invoice is issued by GST Registered Taxpayers. If you are a GST registered business, you need to provide GST-complaint invoices to your clients for sale of good and/or services.
What are the mandatory fields a GST Invoice should have?
A tax invoice is generally issued to charge the tax and pass on the input tax credit. A GST Invoice must have the following mandatory fields-
• Invoice number and date
• Customer name
• Shipping and billing address
• Customer and taxpayer’s GSTIN (if registered)**
• Place of supply
• HSN code/ SAC code
• Item details i.e. description, quantity (number), unit (meter, kg etc.), total value
• Taxable value and discounts
• Rate and amount of taxes i.e. CGST/ SGST/ IGST
• Whether GST is payable on reverse charge basis
• Signature of the supplier
**If the recipient is not registered AND the value is more than Rs. 50,000 then the invoice should carry:
1. name and address of the recipient,
2. address of delivery,
3. state name and state code

Q-3: How to personalize GST Invoices?

Ans: You can personalize your invoice with your company’s logo.

Q-4: What are other types of invoices?

Ans: (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, totaling 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:

• Tax invoice has a lower taxable value than the amount that should have been charged

• 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:

• Tax invoice has a higher taxable value than the amount that should have been charged

• Tax invoice has a higher tax value than the amount that should have been charged

• Buyer refunds the goods to the supplier

• Services are found to be deficient

Q-5: Can you revise invoices issued before GST?

Ans: 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.

Q-6: What is GST revised invoice?

Ans: 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.

Q-7: GST Invoicing under Special Cases?

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

Q-8: How many copies of Invoices should be issued?

Ans: For goods– 3 copies
For services– 2 copies

Q-9: What’s the difference between invoice date and due date?

Ans: Invoice date refers to the date when the invoice is created on the bill-book, while the due date is when the payment is due on the invoice.

Q-10: How to issue an invoice under reverse charge?

Ans: In case of GST payable under reverse charge, you must additionally mention that tax is paid on a reverse charge, on the GST invoice.

Q-11: Is it mandatory to maintain invoice serial number?

Ans: Yes, the invoice serial number must be maintained strictly. You may change the format by providing a written intimating the GST department officer along with reasons for the same.

Q-12: Can I digitally sign my invoice through DSC?

Ans: Yes, you can digitally sign invoice through DSC.

Q-13: What is definition of Tax Invoice?

Ans: A Tax invoice is a legal document that is issued by seller to the buyer for the taxable transaction made between them. It included details of parties, goods/ services supplied and tax involved.

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