TAX INVOICE UNDER GST

[Dr. Sanjiv Agarwal]

Meaning of  ‘tax invoice’?

As per section 2(60) read with section 23 of Model GST law, ‘tax invoice’ is required to be issued by a registered taxable person showing description of goods and/or services, value, tax and other particulars at the time of supply. It is a document evidencing supply of goods and services which becomes the basis for charge of tax.

According to explanation provided under section 23 of Model GST law, ‘tax invoice’ shall be deemed to include a document issued by an input service distributor(ISD) under section 17, and shall also include any supplementary or revised invoice issued by the supplier in respect of a supply made earlier.

Thus, ‘tax invoice’ shall be deemed to include-

1. a document issued by an input service distributor, and
2. any supplementary or a revised invoice issued by the supplier in respect of a supply made earlier.

Invoice is a document which provides evidence of existence of transaction of supply of goods and/or services. Tax invoice issued by the registered taxable person is an  essential document to establish time of supply and for the recipient of goods and/or services to avail input tax credit. The matching of transactions of inwards and outward supplies is also done on the basis of tax invoice.

Who should issue invoice

As per section 23 of Model GST law a registered taxable person supplying taxable goods shall issue, at the time of supply, a tax invoice showing the description, quantity and value of goods, the tax charged thereon and other prescribed  particulars.

Therefore, a registered taxable person supplying taxable goods shall issue a tax invoice-

1. at the time of supply,
2. tax invoice should show,

i. the description, quantity and value of goods,

ii. tax charged thereon, and

iii. other details.

A registered taxable person can only issue a tax invoice at the time of supply of goods. Thus, determining the time of supply of goods is important.

As per section 23 of Model GST law, a registered taxable person supplying taxable services shall issue a tax invoice, within the prescribed time, showing the description, the tax charged thereon and such other particulars as may be prescribed.          

Therefore, a registered taxable person supplying taxable services shall issue a tax  invoice-

1. within the prescribed time,
2. Tax invoice should show-

1.   description of services,
2.   tax charged , and
3.   other details.

Particulars to be shown in a tax invoice

According to section 23 of Model GST law, read with Rule 1 of draft GST Invoice Rules, a tax invoice issued by the supplier shall contain the following details:

1. name, address and GSTIN of the supplier,
2. a consecutive serial number containing only alphabets and/or numerals, unique for a financial year,
3. date of its issue,
4. name, address and GSTIN/ Unique ID Number, if registered, of the recipient,
5. contain the following details:
   1. name and address of the recipient and the address of delivery,
   2. the name of State and its code,
   3. if such recipient is unregistered, and
   4. where the taxable value of supply is fifty thousand rupees or more,
6. HSN code of goods or accounting code of services,
7. description of goods or services,
8. quantity in case of goods and unit or Unique Quantity Code thereof,
9. total value of goods or services,
10. taxable value of goods or services taking into account discount or abatement, if any,
11. rate of tax (CGST, SGST or IGST),
12. amount of tax charged in respect of taxable goods or services (CGST, SGST or IGST),
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. place of delivery where the same is different from the place of supply,
15. whether the tax is payable on reverse charge,
16. the word “Revised Invoice” or “Supplementary Invoice”, as the case may be, indicated prominently, where applicable along with the date and invoice number of the original invoice, and
17. signature or digital signature of the supplier or his authorized representative.

Details required in a tax invoice of supply meant for export

According to proviso to Rule 1 of draft GST Invoice Rules, in case of exports, an invoice shall carry an endorsement ‘supply meant for export on payment of IGST’ or ‘supply meant for export under bond without payment of IGST’, as the case may be, and shall, in lieu of the details specified in clause (e) of Q. No. 5 above , contain the following details:

1. name and address of the recipient,
2. address of delivery,
3. name of the country of destination, and
4. number and date of application for removal of goods for export in form ARE-1.

Other details required to be mentioned in the invoice

According to proviso to Rule 1 of draft GST Invoice Rules, the Board/Commissioner may issue a notification to specify any of the following additional requirements –

1. the number of digits of HSN code for goods or, as the case may be, the accounting code for services, that a class of taxable persons shall be required to mention, for such period as may be specified, and
2. the class of taxable persons that would not be required to mention the HSN code for goods or, as the case may be, the accounting code for services, for such period as may be specified.

Accordingly, the Board or Commissioner may notify the following-

1. class of taxable persons that would be required to mention the HSN code for goods or accounting code for services for the period as may be notified.
2. class of taxable persons that would not be required to mention the HSN code for goods or accounting code for services for the period as may be notified.

The period for which such information may or may not required will also be specified in the notification.

Time limits for issuance of a tax invoice  

As per section 23(ii) of model GST law read with Rule 1(2) of draft GST Invoice Rules, any tax invoice is required to be issued as per following time frame:

1. In case of goods, at the time of supply,
2. In case of services, as per time limits indicated below:

1. Tax invoice for supply of services- within a period of thirty days from the date of supply of service,
2. Tax invoice for continuous supply of services- within a period of thirty 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,
3. Tax invoice for supplier of service in case of a banking company or a financial institution including a non-banking financial company(NBFC)- within forty five days from the date of supply of service.

Time limits of issue of a tax invoice for services can be summarized as follows :

Types of supply	Time frame
Supply in ordinary course	Within 30 days from the date of supply of services
Continuous supply	Within 30 days from the date when each event specified in the contract for payment
Banking company/Financial Institution including NBFC	Within 45 days from the date of supply of services

Discussions to this article

[Ganeshan Kalyani]

Nice article sir.

The provision of digitally signed invoice would be there in the GST regime. am i right sir.