Every GST registered business should issue a bill of sale whenever goods or services are sold. If the goods and services are included in the GST Act, a GST invoice needs to be mandatorily issued as per the new rules under the GST Act implemented on 1st July 2017.
Now let’s start with the basic question.
What exactly is a GST invoice?
In simple terms, a GST invoice is nothing but a list of goods sold or services provided, along with the amount due for payment. It contains information such as the name and contact details of the seller and the buyer, a list of products/services with their quantity, rate, discounts if any, the due date of payment and the payment terms. As per the GST Act, 2017, the issuance of GST invoices is mandatory for every registered person for the supply of taxable goods and services.
Who all should issue GST Invoice?
If you are a GST registered business you are required to issue a GST invoice for sales of any goods or services. In the cases where you are supplying goods or services that are GST exempted or you are a composite scheme dealer, a bill of supply needs to be issued in lieu of an invoice. Check out what bill of supply is below.
Mandatory details in GST Invoice
According to the GST regime, the following fields are mandatory in a GST invoice.
- Name, address and GSTIN (GST Identification Number) of the supplier
- Invoice number
- Invoice Date
- Name, address, GSTIN, if registered, of the buyer.
- Place of supply
- HSN Code
- Product/service name and description, quantity, unity, rate, discount etc
- GST tax rate for the item and total GST charged ( CGST, SGST, IGST)
- Reverse charge statement
- Signature of the supplier.
Take a look at GST complied sample invoice from Zenys Invoice Generator.
Sample GST Formats
Here are some more sample GST invoice formats. Download them and create your GST invoice for free. You can check out more samples by clicking here.
By when should you issue an invoice?
As per the existing GST rules, there are specific time periods for issuing a GST invoice. The time to issue an invoice depends on
- Whether it is the supply of goods
- Whether it is the supply of services
- Supply of Goods
- Normal Case: In such cases, you should issue an invoice before or at the time of removal of goods. Removal as defined under Section 2 (96) of the principal Act is when the goods are directly collected by the recipient or dispatched for delivery by the supplier.
- Continuous Supply: For a continuous supply of goods, an invoice should be issued on or before receiving the payment or the date of issuance of the account statement.
- Supply of services
- Normal Case: In the normal case the invoice must be issued before or after the service is provided. If the invoice is issued after the service is provided, it has to be issued within the specified time of 30 days from the date of service provided.
- Financial Services: If the services are provided by banks, NBFCs or other financial institutions, an invoice must be issued within 45 days from the date of service provided.
Different Types of Invoices in GST
According to the old regime, there were only two types of invoices which were Tax Invoice and Retail Invoice. As per the new rules in the GST system, there are different types of invoices.
- Tax invoice
- Bill of supply
- Receipt Voucher
- Refund Voucher
- Payment Voucher
- Credit Note
- Debit Note
Let‘s look at them in detail.
- Tax Invoice
Every GST registered person should issue a GST invoice called ‘tax invoice’ if they are supplying taxable goods or services. Tax invoice allows the buyer to claim Input Tax Credit (ITC).
- Bill of Supply
If the GST registered person cannot charge/collect tax as per certain provisions in the GST system, a ‘bill of supply’ should be issued.
A bill of supply should be issued when :
- When the GST registered person is supplying goods/services that are GST exempted.
- When the supplier is registered under the ‘Composite Scheme’.
*Composition scheme can be opted by taxpayers whose turnover is less than 1.5 crores. A person registered under the composite scheme is required to pay a fixed tax of their annual turnover. The amount should be paid on a quarterly basis.*
To know more about the scheme and how you can opt for it, check the link below.
Invoice-cum-bill of supply
In the cases where a GST registered person supplies both GST applicable and GST exempted goods/services, the person has to issue a single invoice titled, ‘Invoice-cum-bill of supply’ as per notification no. 45/2017, dated 13.10.2017 by the GST system.
3. Receipt Voucher
If a GST registered person has received an advance payment for any supply of goods/services, a receipt voucher should be issued.
4. Refund Voucher
If for some reason the supplier is not able to supply the goods/services after issuing the receipt voucher, a refund voucher should be issued.
5. Payment Voucher
A registered recipient of goods/services who is liable to pay taxes under the reverse scheme should issue a payment voucher to the supplier at the time of making the payment.
6. Credit Note
Credit Note is issued by the buyer to the seller when:
- goods are returned or,
- there is a reduction in values of goods/services or,
- there is a discount claim
The supplier should include the credit note details in the tax return to reduce the tax liability.
Time limit to issue credit note: By the month of September following the end of the financial year or the date of filing the tax return, whichever is earlier.
7. Debit Note
If the supplier has charged less than the actual price of the goods/services, the person can issue a debit note to the buyer.
The supplier should include the debit note value in the tax return to increase the tax liability.
How can you personalize your GST Invoice?
A GST invoice can be personalized in the following ways:
- Uploading your company logo in the invoice
- Adding a signatory field.
- Having a letterhead with the company name and address.
Zenys invoice generator provides you with all the options to personalise your GST invoice. Here is a sample invoice template from Zenys with fields to add your company logo and signature.
- How can I create a GST invoice online?
You can create a GST invoice online by using an online GST invoice generator like Zenys. All you have to do is fill up the field in the GST invoice format provided. You can download it and mail it to your customers. You can also download a GST invoice format in Excel or Word and customize it as per your requirements.
- How many copies of invoices are required under the GST?
In the case of goods, you require 3 copies, if it involves transportation. ( One copy for the customer, the 2nd copy for your records and the 3rd for the transporter of goods). For services, 2 copies of invoices are required. (One copy is issued to the customer, the other copy is retained by the suppliers for their records).
- What is reverse charge?
Reverse charge is a mechanism by which the buyer of goods/services is liable to pay taxes instead of the supplier. If a service is listed under reverse charge the GST will be collected by the receiver of goods/services. This is applicable in 2 cases:
- When the supply of goods/services is notified by the government.
- When a GST registered person buys goods/services from an unregistered seller.
- How to issue an invoice under reverse charge?
To issue an invoice under reverse charge, you should mention that the tax is payable under the reverse charge scheme in the GST invoice.
- What is HSN Code?
HSN code stands for “Harmonized System of Nomenclature”. It is a 6-digit uniform code to bring a uniform classification of goods. HSN code facilitates the systematic classification of goods all over the world. This system assigns codes to products globally and simplifies the classification processes of products across the world facilitating international trade. This classification helps in understanding the tax rate of specific products in a country which applies to both imports and exports. Businesses with a turnover of more than ₹5 crores should furnish a 6 digit HSN code and businesses with a turnover of up to 5 crores should furnish a four-digit HSN code on the B2B invoices. Using invoice generator you can add the HSN code in the respective field provided in the invoice template.
- Is it compulsory to mention HSN code in the GST invoice?
Mentioning the HSN code in the GST invoice depends upon the turnover of the taxpayer. Businesses with a turnover of more than ₹5 crores are required to furnish 6 digit HSN code and businesses with a turnover of up to 5 crores should furnish a 4 digit HSN code on the invoices. It is not required for businesses with a turnover of less than 1.5 crores to mention HSN code in the invoice.