In this article, I will be explaining every detail about the GST invoice, including who has to create it, what are the mandatory fields, and when a GST invoice should be created.
Let’s start with the basics.
GST invoice
It is a detailed statement with the information about any service provided or goods supplied by the issuer. It includes a complete detail on the amount payable, total GST and other mandatory information.
Who needs to issue GST Invoice?
Any taxpayer who is registered under the GST regime has to issue GST invoice whenever he/she/it performs a sales of any service or goods.
When must an invoice be generated?
The GST law has laid down clear guidance on when the issue needs to be issued in case of goods and services. Let’s take a look at them one by one.
For Goods under Normal Case:
On or before the delivery is made or the goods are removed from the said place.
For Goods under Continues Supply:
On or before the payment for the said goods or issue of account statement.
Services provided under Normal Case:
Within 30 days of supply of services.
Services provided by the Banks & NBFCs:
Within 45 days of supply of services.
Mandatory fields in the GST invoice
As per the guidelines of GST department, the following are the mandatory fields that must be included in a GST invoice. Without these details, the invoice will be declared GST non-compliant.
- GSTIN of the Supplier
- GSTIN of the Recipient (only if registered under GST law)
- Invoice number (the series must be maintained throughout the year)
- Invoice Date
- Name of the Recipient
- Address of where the goods or services are supplied
- Billing address
- Place of Supply
- HSN (Harmonised Coding Description & Coding System) code in case of goods
- SAC (Servicing Accounting Code) in case of services
- Complete detail of the item including, description, quantity, unit and rate
- Total Taxable value
- Discounts (if any)
- Rate and amount of CGST, SGST or IGST (whichever is applicable)
- Is GST payable based on RCM (Reverse Charge Mechanism)
- Signature of the Supplier
Types of GST invoices other than the standard GST invoice
Apart from the standard GST invoice, there can be three types of GST invoices based on a different type of Suppliers & Recipients. Let’s take a look at the different types of invoices.
- Debit note & Credit note
In some cases, the final amount payable by the Recipient is more than the amount mentioned in the invoice. This results in the lower taxable amount in the bill and lower tax payable on the supply.
Under this condition, a debit note is issued by the Supplier to the Recipient.
In some cases, the final amount payable by the Recipient is less than the amount mentioned in the invoice. This results in a higher taxable amount in the bill and higher tax payable on the supply.
Moreover, if the Recipient finds the services substandard or returns the goods, the taxable value & tax decreases.
Under these conditions, a Credit note is issued
- A Bill of Supply
A bill of supply is issued in a case where the Supplier cannot charge any tax from the Recipient. In short, a Bill of Supply is just like a standard GST invoice, minus tax.
It needs to be issued in the following circumstances:
- If the Supplier is registered under Composition Scheme under GST.
- If the Supplier is supplying exempted services or goods.
It’s important to note here that as per the notification from the GST department, a supplier can create a single “Invoice-cum-Bill of Supply if he/she/it is supplying taxable and exempted goods.
- Aggregate Invoice
The facility of this type of invoice is conducive for the small & retail business owners. Under this facility, a business can issue an aggregate invoice for multiple bills if the taxable value of each bill is less than INR 200.
This reduces the complexities and unnecessary burden on small & retail business owners.
Conclusion
Preparing a GST invoice is instead a simple task. But, it is essential to maintain a vigil eye while preparing it as any discrepancy could lead to a serious issue while filing the return or during the reconciliation.
If you are facing any issue while creating a GST invoice, or are need of assistance for any GST related query, feel free to reach us. Our experts will be more than happy to help you out!
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