Invoice, Debit or Credit note, Vouchers Under GST (Goods and services Tax)

Invoicing is an important function of a business, through this only revenue reaches the stakeholders. The invoice becomes a basic document for recording the transaction in books of accounts.

Download particulars of Invoices, Vouchers, Debit or credit note and delivery challan. Here

The government has notified rules of invoicing specifying the elements of an invoice such as supplier’s name & address, GST tax rates etc that need to be presented. Let’s get into it:

Invoicing under GST

In this article, we will learn about-

1. Invoices

A. Tax Invoice 

Tax invoice is issued to the recipient of a supply through which recipient claims input credit of tax paid on such supply (purchase)

whereas Bill of supply is issued by the registered suppliers who are prohibited from collecting GST like composite dealers and exempted goods/service suppliers.

Query: Pls provide Tax Invoice format under GST !!

Solution: Govt. has provided only the content of tax invoice, credit and debit note. Download the content of Tax invoice HERE.  

The content of Tax Invoices changes according to the type of Recipient like if the recipient:

1. Is from the state of supplier: Tax invoice will include CGST(50%) and SGST (50%).
2. Is From outside the state of supplier: Tax invoice will include only IGST (100%)
3. Is Liable to pay tax in accordance to Reverse Charge: Tax Invoice should indicate that the tax is payable on RCM (Reverse Charge Mechanism)

A registered recipient is required to issue Tax Invoices while purchasing from an UNREGISTERED person.

When To Issue Tax Invoice?

1. In the case of supply of taxable goods by a registered person

(i). Where supply involves movement of goods

Tax invoice shall be issued before or at the time of removal of goods for supplies to the recipient.

(ii).  Where supply involves other than movement of goods

Tax invoice shall be issued before or at the time of delivery of goods or making available to the recipient.

2. In case of supply of taxable service by a registered person

Tax invoice shall be issued within a period of thirty days from the date of supply of service.

However, where a supply of service ceases under a contract before 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 supply made before cessation.

However, an insurer, a banking company, a financial institution including a non-banking financial company can issue tax invoice (or any other document in lieu thereof) within forty-five days from the date of supply of service.

Let’s see few cases of invoicing under GST:

 (a) In case of continuous supply of goods

The invoice should be issued either before or at the time of any payment is received or any statements of accounts are issued.

(b) In the case of continuous supply of service

(i) Where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment.

(ii) Where the due date of payment is not given in the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment.

(iii) Where the payments are linked to the completion of an event/ project, the invoice shall be issued on or before the date of completion of that event/ project.

(c) where goods are sent on approval or return basis

Where goods are sent or taken on approval for sale or return, the invoice shall be issued on acceptance of goods by the recipient or six months from the date on which such goods were sent for approval, whichever is earlier.

(d) In case of revised Invoice

Issuing revised invoice is just an option provided by the law to make your previous invoices GST compliant. It should be issued within one month from the date of issuance of the certificate of registration for the period beginning from the effective date of registration till the date of issuance of the certificate of registration.

Manner of Issuing Invoice

(i) In case of supply of goods

The invoice shall be issued in triplicate.

(ii) In case of supply of service

The invoice shall be issued in duplicate.

B. Bill of Supply

In GST there are some cases where the supplier is prohibited from charging GST and hence a Tax invoice can’t be issued instead another document called Bill of Supply is issued.

Following persons are required to issue Bill of supply instead of tax invoice:

(a) Composition Dealer under GST.

(b) Supplier of exempted goods or service or both.

C. Invoice-Cum-Bill of Supply

A registered supplier may issue a single invoice as an invoice-cum bill of supply if he supplies both taxable and exempted goods/services to an unregistered person. 

Example: Ram (Registered), a retailer, sells both taxable and exempted goods in his store. While selling to an unregistered person, he should issue invoice-cum-bill of supply.

If he sells to a registered recipient, he should issue two separate invoice namely tax invoice for taxable goods and bill of supply for exempted goods.

2. Credit or Debit note

A. Credit Note

 Issued by registered supplier after the issue of tax invoice-

1. if tax amount or goods/services value charged previously was excess; or
2. Supplied goods or services were deficient

Registered person (issuer) shall declare such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or 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.

After the issue of credit note, GST liability of supplier will get reduced. However, 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.

B. Debit Note

 Issued by registered supplier after the issue of tax invoice if tax amount or goods/services value charged previously was less.

Registered person (issuer) 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.

“debit note” shall include a supplementary invoice.

3. Voucher

A. Receipt Voucher

A registered person should issue receipt vouchers when he receives advance payment for goods or services or both. charges GST on receipt of advance payment for services at the applicable rate.

From 15th Nov 2017, GST is not payable on an advance receipt for goods. (Notification 66-CT)

The content of receipt vouchers is almost same as the tax invoice.

B. Refund Voucher

After the issue of receipt voucher, if goods/services are not supplied and as a result, no tax invoice is issued, the registered person may issue refund voucher to the person who had made the advance payment.

Refund voucher should always indicate GST amount which was previously charged on receipt voucher.

C. Payment Voucher

A registered person should issue payment voucher while paying the suppliers covered under reverse charge mechanism (RCM).

Payment voucher should include-

1. name, address and Goods and Services Tax Identification Number of the supplier if registered;
2. a consecutive serial number not exceeding sixteen 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;
3. date of its issue;
4. name, address and Goods and Services Tax Identification Number of the recipient;
5. description of goods or services;
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 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; and
10. signature or digital signature of the supplier or his authorised representative.

4. Delivery Challan

A Consignor should issue delivery challan for the purpose of-

1. supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,
2. transportation of goods for job work,
3. transportation of goods for reasons other than by way of supply, or
4. such other supplies as may be notified by the Board

It should be issued in triplicate form namely-

1. ORIGINAL FOR CONSIGNEE
2. DUPLICATE FOR TRANSPORTER
3. TRIPLICATE FOR CONSIGNER

Relevant FAQ

Q: I sell taxable & exempt products to the same person (B2C), is it required to issue tax invoice and bill of supply separately? 

A: Issue one tax invoice for the taxable invoice and also declare exempted supply in the same invoice.

Q: How to treat following transaction in GST (i) Delivered supply shortages in Transit. (ii) The customer gets less quantity and pays less.

A: The supplier may issue credit note to the customers.

Q: Should we issue Self Invoice for GST liability discharge on RCM or GST can be discharged through expenses booking voucher?

A: For RCM liabilities due to purchase from an unregistered person, tax invoice and payment voucher have to be issued on self.

Source: CBEC