TAX INVOICE, CREDIT AND DEBIT NOTES UNDER MODEL ‘GST’ LAW

[Mr. M. GOVINDARAJAN]

Chapter VII of Model GST law (‘law’ for short) discusses about the tax invoice, credit and debit notes.

Tax invoice

Tax invoice is to be issued for both taxable goods as well as taxable service.  Section 23 of the law provides that a registered taxable person supplying-

• Taxable goods shall issue a tax invoice showing the description, quantity and value of goods, the tax thereon and such other particulars as may be prescribed;
• Taxable service shall issue a tax invoice, within the prescribed time, showing the description, the tax charges thereon and such other particulars as may be prescribed.

Contents of tax invoice

The tax invoice, in general, shall have the following details-

• name, address and GSTIN of the supplier;
• a consecutive serial number containing only alphabets and/or numerals, unique for a financial year;
• date of its issue;
• name, address and GSTIN/unique id number, if registered, of the recipient;
• name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is unregistered and where the taxable value of supply is ₹ 50,000/- or more;
• HSN code of goods or Accounting Code of Services;
• description of goods or services;
• quantity in case of goods and unit or Unique Quantity Code thereof;
• total value of goods or services;
• taxable value of goods or services taking into account discount or abatement, if any;
• rate of tax (CGST, SGST or IGST);
• amount of tax charged in respect of taxable goods or services (CGST, SGST or IGST);
• place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce;
• place of delivery where the same is different from the place of supply;
• whether the tax is payable on reverse charge;
• the word ‘Revised Invoice’ or ‘Supplementary Invoice’ is to be indicated prominently, where applicable along with the date and invoice number of the original invoice; and’
• signature or digital signature of the supplier or his authorized representative;

The Board/Commissioner may specify, by notification-

• the number of digits of HSN code for goods or the accounting code for services, that a class of taxable persons shall be required to mention, for such period as may be specified in the said notification, and
• the class of taxable persons that would not be required to mention the HSN code for goods or, the Accounting Code for Services, for such period as may be specified in the said notification.

Invoice in exports

The invoice, in case of exports, shall carry an endorsement ‘Supply meant for Export on Payment of IGST’ or ‘Supply meant for export under bond without payment of IGST’.  The following details are to be incorporated in the invoice-

• name and address of the recipient;
• address of delivery;
• name of the country of destination; and
• number and date of application for removal of goods for Export (ARE-1).

Period of issue of invoice

The invoice, in case of taxable supply of service, shall be issued within a period of 30 days from the date of supply of the service.  In respect of continuous supply of services, the invoices shall be issued within a period of 30 days from the date when each event specified in the contract, which requires the recipient to make any payment to the supplier of services, is completed.  Where the supplier of service is a banking company or a financial institution including a non banking financial company, the period within which the invoice is to be issued shall be 45 days from the date of supply of service.

Manner of issue of invoice

The invoice shall be prepared in triplicate in case of supply of goods.  The original copy is to be marked as ‘original for recipient’.  The duplicate copy is to be marked as ‘Duplicate for Transporter’ and the triplicate copy is to be marked as ‘Triplicate for supplier’.  The duplicate copy is not required to be carried by the transporter if the supplier has obtained an Invoice Reference Number.

The invoice in case of supply of services shall be prepared in duplicate.  The original copy is to be marked as ‘original for recipient’ and the duplicate copy is to be marked as ‘duplicate for supplier’.

The serial number of invoices issued during a tax period shall be furnished electronically through the common portal in Form GSTR-1.

Invoice Reference Number

A registered taxable person may obtain an ‘invoice reference number’ from the common portal (the common GST electronic portal approved by the Central Government and State Governments, on the recommendation of the Council, for the specified purposes, as may be notified under this Act) by uploading, on the said portal, a tax invoice issued by him in Form GST-INV-1 and produce the same for verification by the proper officer as required under Section 61 in lieu of tax invoice.  The Invoice Reference Number shall be valid for a period of 30 days from the date of uploading.

Revised invoice

A registered taxable person may issue a revised invoice against the invoice already issued during the period starting from the effective date of registration till the date of issuance of certificate of registration to him.

The registered taxable person may issue a consolidated revised tax invoice in respect of all taxable supplies made to a recipient who is not registered under the Act during such period.  In case of inter-State supplies, where the value of a supply does not exceed ₹ 25,000/- a consolidated revised invoice may be issued in respect of recipients located in a State, who are not registered under the Act.

Bill of supply

A registered taxable person supplying non-taxable goods and/or services or paying tax under the provisions of section 8 shall issue, instead of a tax invoice, a bill of supply containing such particulars as may be prescribed.  A bill of supply shall be issued by the supplier containing the following particulars-

• name, address and GSTIN of the supplier;
• a consecutive serial number containing only alphabets and/or numerals, unique for a financial year;
• date of issue;
• name, address and GSTIM/.UID, if registered of the recipient;
• HSN Code of goods or Accounting Code for services;
• Description of goods of services;
• value of goods or services taking into account discount or abatement, if any; and
• signature or digital signature of the supplier or his authorized representative.

The bill of supply is not required to be issued if the value of the goods or services is less than ₹ 100/- where the recipient of the goods or services requires such bill.  The registered taxable person shall prepare a consolidated bill of supply at the close of each day in respect of all such supplies where the bill of supply has not been issued due to lesser value to ₹ 100/-.

Credit or debit notes

The explanation to Section 23 provides that “tax invoice” shall be deemed to include a document issued by an Input Service Distributor under section 17, and shall also include any supplementary or revised invoice issued by the supplier in respect of a supply made earlier.

Section 24(1) of the law provides for the issue of a credit note.  Where a tax invoice has been issued for supply of any goods and/or services and the taxable value and/or tax charged in that tax invoice is found to exceed the taxable value and/or tax payable in respect of such supply, the taxable person, who has supplied such goods and/or services, may issue to the recipient a credit note containing such particulars as may be prescribed.  Such credit note may be issued on or before the thirtieth day of September following the end of the financial year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier.   No credit note shall be issued by the said person if the incidence of tax and interest on such supply has been passed by him to any other person.

Section 24(2) of the law provides for the issue of a debit note. Where a tax invoice has been issued for supply of any goods and/or services and the taxable value and/or tax charged in that tax invoice is found to be less than the taxable value and/or tax payable in respect of such supply, the taxable person, who has supplied such goods and/or services, shall issue to the recipient a debit note containing such particulars as may be prescribed on or before the thirtieth day of September following the end of the financial year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier.

Section 24(3) of the law imposes an obligation on a person who issues or receives a debit note or credit note.  Any registered taxable person who issues or receives a credit or debit note in relation to a supply of goods and/or services shall declare the details of such credit or debit note, as the case may be, in the return for the month during which such credit or debit note has been issued or received or in the return for any subsequent month but not later than September following the end of financial year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in the manner specified in this Act.

A credit or debit note shall contain the following details-

• name, address and GSTIN of the supplier;
• nature of document;
• a consecutive serial number containing any alphabets and/or numerals, unique for a financial year;
• date of issue of document;
• name, address and GSTIN/UID, if registered, of recipient;
• name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is unregistered;
• serial number and the date of corresponding tax invoice or bill of supply;
• taxable value of goods or services, rates of tax and the amount of tax credited or debited to the recipient; and
• signature or digital signature of the supplier or his authorized representative.

Tax invoices of ‘input service distributor’

"Input Service Distributor" means an office of the supplier of goods and / or services which receives tax invoices issued under section 23 towards receipt of input services and issues tax invoice or such other document as prescribed for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above.

For the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST, Input Service Distributor shall be deemed to be a supplier of services.

A tax invoice issued by an ‘Input Service Distributor’ shall contain the following details-

• name, address and GSTIN of the Input Service Distributor;
• a consecutive serial number containing only alphabets and/or numerals, unique for a financial year;
• date of its issue;
• name, address and GSTIN of supplier of services, the credit in respect of which is being distributed and the serial number and date of invoice issued by such supplier;
• name, address and GSTIN of the recipient to whom the credit is distributed;
• amount of the credit distributed; and
• signature or digital signature of the supplier or his authorized representative.

Where the Input Service Distributor is an office of a banking company or a financial institution including a non banking financial company, a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the information as indicated above.

Tax invoice of a banking company

Where the supplier of taxable service is a banking company or a financial institution including a non banking financial company, the said supplier shall issue a tax invoice or any other document in lieu thereof, by whatever name called, whether or not serially numbered and whether or not containing the address of the recipient of taxable service but containing other information as required for a tax invoice.

Tax invoice of a GTA

Where the supplier of taxable service is a goods transport agency supplying services in relation to transportation of goods by road in a goods carriage, he shall issue a tax invoice or any other document in lieu thereof, by whatever named called-

• containing the gross weight of the consignment;
• name of the consignor and the consignee;
• registration number of goods carriage in which the goods are transported;
• details of goods transported;
• details of place of origin and designation;
• GSTIN of the person liable for paying tax whether as consignor or consignee or GST; and also
• contains other information as prescribed for tax invoice.

Tax invoice of passenger transportation service

Where the supplier of taxable service is supplying passenger transportation service, a tax invoice shall include ticket in any form, by whatever name called, and whether or not containing the address of the recipient of service but containing other information for a tax invoice.

Discussions to this article

[Ganeshan Kalyani]

Nice article. Very useful.