6th June 2017
As now, we all know that Indian government is planning to introduce a national tax law, GST law. With the introduction of this GST, all the streams of the tax structure will be clubbed into a single tax and it will improve the tax collections. GST is an inclusive and comprehensive tax levy on the supply of goods and services.
Invoicing is an important part of the every tax, as the invoice is the only factor that establishes the liability; hence it states an incurred debt. In every transaction, an invoice is issued by the supplier or the seller. The invoice usually encompasses S.No, details of product including the product name, its description, quantity, etc along with details of supplier, purchaser, tax charged and other particulars such as discounts, terms of sale etc.
Since GST is a single one nation tax, so it will be compulsory to issue tax invoice, receipt vouchers, debit notes, credit notes, supplementary invoice and a bill of supply by all taxpayers as per the nature of the transaction. These are the only documents, which are given importance in GST. It removes the prevalent invoicing system that includes Tax Invoice, VAT Invoice, Excise Invoice and a Retail or Commercial Invoice.
There are different types of documents which are required to be issued in different circumstances viz, tax invoice, supplementary invoice, debit note, bill of supply and voucher’s credit note.
1. Tax Invoice
When a registered taxable person supplies taxable goods or services, a tax invoice is issued. In short, each enlisted taxable man for all the supplies to be effected requires issuing a tax invoice under GST. Issuing a tax Invoice is necessary under GST law. Some of the crucial details under tax invoice are trade discounts, amount of GST charged, HSN code of goods/accounting code of services etc.
The GST model law has outlined the time period for the issue of GST tax invoices, revised bills, debit notes and credit note. In a normal case, the GST tax invoice has to be issued by a registered dealer before/at the time of
(a) Removal of Goods, if supply involves movement of goods Delivery of Goods/making available to recipient,
(b) Issuance of successive statements accounts, if supply doesn't involve movement of goods,
(c) If supply is a continuous supply of goods when recipient approves or 6 months from the date of removal, if supplied is on approval basis
Every Registered Taxable person who Supplies Taxable Services shall issue a tax Invoice:
(a) within 30 days from the date of supply, in normal cases;
(b) within 30 days from the due date of payment, in the case of continuous supply of services where due date ascertainable;
(c) within 30 days from the date of payment, in a case of continuous supply of services where due date is not ascertainable at the time of cessation;
(d) If the supplier is a bank or any financial institution, then within 45 days from the supply of service.
The manner of issuing Tax Invoice:
(a) In case of supply of Goods, Tax Invoice shall be prepared in TRIPLICATE
Original for recipient
Duplicate for Transporter
Triplicate for the supplier
(b) In case of supply of Services, Tax Invoice shall be prepared in DUPLICATE
Original for recipient
Duplicate for supplier
2. Bill of Supply
Under GST there are minute instances where the supplier is not permitted to charge any tax. Therefore, a Tax Invoice can’t be issued but alternatively another document called Bill of Supply is issued. As per proviso to section 23 of Model GST Law a registered taxable person supplying non-taxable goods and/or services or paying tax in relation to composition levy shall issue, instead of a tax invoice, a bill of supply( in lieu of tax invoice) containing the prescribed particulars.
Accordingly, for a Bill of supply, following points are relevant:
(a) bill of supply to be issued by registered taxable person supplying non-taxable goods and/or services,
(b) bill of supply to be issued by registered taxable person paying amount under the composition levy,
(c) bill of supply containing prescribed particulars is issued in lieu of tax invoice,
(d) bill of supply will also be issued by unregistered persons who are not required to pay GST, and
(e) Bill of supply will generally contain the similar particulars as in case of tax invoice except that of tax charged.
3. Debit and Credit Note
All revision, rectification, modification, settlement of taxable value or tax charged may have to be carried out through debit and credit notes.
(a) Credit Note : When a registered Dealer issues a tax invoice for supply of goods or services and in such invoice the amount of tax charged and taxable value is more than the taxable value and tax payable, then the taxable person, who supplied the goods, may issue a credit note to the recipient containing such particulars as may be prescribed. Credit note needs to be issued not later over September month about succeeding quite a while over which supply might have been aggravated or date of filling about yearly return, whichever may be prior.
(b) Debit Note : When a Registered Dealer issues tax invoice for supply of goods or services and in such invoice the amount of tax charged and taxable value is less than the taxable value and tax payable, then said taxable person, who supplied the goods, may issue a debit note to the recipient containing such particulars as may be prescribed. There is no time limit for the issuance of debit note.
4. Supplementary Invoice
Supplementary tax invoice has not been defined under Model GST law. Supplementary tax invoice has to be issued by taxable person in case where any deficiency is found in a tax invoice already issued by a taxable person. Thus, supplementary tax invoice is to be issued where any deficiency is found in a tax invoice issued already to supplement or remove such deficiency.
5. Receipt Voucher
A receipt voucher may be issued in case of receipt of any advance payment. Receipt voucher might a chance to be issued in the occurrence from claiming advance receipt for supply about products or services.
Invoicing in GST will be vital for both supplier and recipient. Proper invoicing can be done only if proper sales order/purchase order is made. Businesses needs to prepare themselves and discuss with their vendors and customers for proper compliance of GST law and avoid any loss of credit.
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