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GST INVOICING

IMPORTANCE OF INVOICE UNDER GOODS AND SERVICES TAX

Under GST a tax invoice is an important document. It not only evidences supply of goods or services, but is also an essential document to avail Input Tax Credit (ITC). An invoice is a commercial instrument issued by a seller to a buyer. It identifies both the trading parties being buyer and seller and also contains following-

  1. Product name
  2. Description
  3. Quantity of goods or services sold
  4. Details of the supplier and the purchaser
  5. Terms of supply
  6. Date of supply
  7. Price of each good sold or service rendered
  8. Discount

Under GST a tax invoice is an important document. It not only evidences supply of goods or services, but is also an essential document to avail Input Tax Credit (ITC). An invoice is a commercial instrument issued by a seller to a buyer. It identifies both the trading parties being buyer and seller and also contains following-

  1. Product name
  2. Description
  3. Quantity of goods or services sold
  4. Details of the supplier and the purchaser
  5. Terms of supply
  6. Date of supply
  7. Price of each good sold or service rendered
  8. Discount

Section 31 of the GST Act, 2017, mandates issuance of invoice or a bill of supply for every supply of goods or services. It is not necessary that only a person supplying goods or services need to issue invoice. The GST law mandates that any registered person buying goods or services need to issue invoice. The GST law mandates that any registered person buying goods or services from an unregistered person needs to issue a payment voucher as well as a tax invoice.

  1. Proof of Supply-Invoice acts as a proof of supply of goods and services by a registered person under GST. It forms the basis on which a supplier can demand payment from the buyer of such goods and services.
  2. Claiming ITC– Invoice is important under GST as it is a document based on which the recipient claims input tax credit for the inputs purchased by him. This means that a recipient cannot claim Input tax credit till the time he does not have a tax invoice or debit with him.

      3.Time of Supply– Invoice is issued at the time of the supply of goods or services. GST is charged at the time of supply of goods or services. Further, invoice is    issued at the time of supply of goods or services. It is one of the factors that indicates time of supply. This is because time of supply is nothing but the date on  which the invoice is issued or the date on which the payment is received, whichever is earlier

TYPES OF INVOICE

The type of invoice to be issued depends upon the category of registered person making the supply.

  • TAX INVOICE

Goods- A registered person supplying taxable goods shall, before or at the time of removal of goods or delivery or making available thereof to the recipient, issue a tax invoice.

Services-A registered person supplying taxable services shall, before or after the provision of service, issue a tax invoice.

  • BILLS OF SUPPLY-

A registered person is dealing only in exempted supplies or is availing of composition scheme (composition dealer), then such a registered person needs to issue a bill of supply in lieu of invoice.

  • Receipt / Refund voucher

A registered person receives an advance payment in respect of supply of any goods or services or both, he has to issue a receipt voucher evidencing receipt of such payment.

Where a receipt voucher is issued, but subsequently no supply is made and no tax invoice issued, the registered person who has received the advance payment can issue a refund voucher against such payment.

  • Credit and Debit Notes

Where tax invoice has been issued for a supply and subsequently it is found that the value or tax charged in that invoice is more than what is actually payable/chargeable or where the recipient has returned the goods, the supplier can issue a credit note to the recipient.

A registered person who issues such a credit note has to declare details of such credit note in the return. The tax liability of the registered person will be adjusted in accordance with the credit note issued.

  • Revised Invoice

A registered person may, within one month from the date of issuance of certificate of registration, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him.

  • Invoice in case of continuous supply

Goods- In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.

Services- Invoice in case of continuous supply of services In case of continuous supply of services, where,

(a) The due date of payment is ascertainable from the contract; the invoice shall be issued on or before the due date of payment;

(b) The due date of payment is not ascertainable from the contract; the invoice shall be issued before or at the time when the supplier of service receives the payment;

(c) The payment is linked to the completion of an event; the invoice shall be issued on or before the date of completion of that event.

  • Tax invoice in Special Cases

An ISD invoice or an ISD credit note issued by an Input Service Distributor.

Private Limited Company
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