The dynamic Goods and Services Tax (GST) introduction has brought about many vital changes in business organizations. Most businesses use various billing and invoicing software to remain compliant and adhere to the current mandatory regulations.
The right GST software can boost efficiency, save time, and help managers focus on more important strategic objectives rather than GST invoice preparation.
What Is Meant By A GST Invoice?
An invoice or a bill is a list of various goods and services provided and the monetary amount due to the concerned party. It is essential that whenever any goods or services are rendered, a valid GST invoice needs to be created.
This type of bill is termed a GST invoice for any goods or services included in the GST (Goods and Services Act) Act.
The Government has passed legislation regarding the gst invoice rules, which were implemented in India on July 1st, 2017. Any seller must prepare a valid GST invoice and send it to the buyer for necessary action.
"It is vital for business managers to be aware of the GST invoice bill rules, format, and requirements. Investing in the right GST software can help you enhance operational efficiency and save time."
Failure to do so will invalidate the business transaction and legally invite punitive action. Many free online invoice generators can help small business houses manage their GST taxation in a streamlined manner.
Technology-enabled tools to facilitate accurate calculations and reduce the workload of employees in preparing detailed invoices.
Looking for GST Software? Check out SoftwareSuggest’s list of the best GST Software solutions.
What Are The Mandatory Fields In GST Invoices?
All GST-registered businesses must provide valid invoices to their clients to sell goods or services. From July 1st, 2017, all GST bills created by suppliers need to mention the following fields:
- Supplier name, GSTIN, and address
- Invoice number and date
- Type of GST invoice – simple invoice, supplementary invoice, or a revised invoice
- Shipping, billing address, customer name, etc.
- GSTIN (if registered)
- Description, quantity, and cost of goods/services
- HSN/SAC code
- CGST/IGST/UTGST/SGST rates and totals
- Discounts and reverse charge details
- Issuer signature
GST bills need to contain all these fields and not miss any required information. If the above information is incorrectly filled, the entire transaction loses authenticity and is deemed invalid.
What Are The GST Invoice Rules?
Issuers of GST invoices must follow certain rules to specify the details of their invoices.
1. GST Invoice Serial Numbers and Details
According to Rule 46(b), the following mandates must be considered for GST invoice serial numbers:
- The invoice numbers should be consecutive and sequential.
- The alphanumeric mix used in the invoice number must be unique for a financial year.
- There cannot be more than 16 characters in the serial number.
- GST must be split into CGST, SGST, and IGST and charged accordingly instead of as a whole.
- IGST must be charged for transactions outside the issuer’s state. On the other hand, SGST and CGST must be charged for sales within the common state.
2. Minimum Amount for Raising a GST Invoice
If the value of goods or services supplied is less than INR 200, a tax invoice is not required to be issued, provided that the recipient is unregistered and does not require an invoice. However, if requested by the recipient, an invoice must be issued.
Alternatively, an aggregate or consolidated tax invoice should be prepared at the end of each day for all supplies for which an invoice has not been issued.
3. GST Invoice Signatures
As per the CGST Rules, the issuer’s signature is a mandatory field in a GST invoice bill. Here are the specifications for a valid signature:
The signature can be done by hand or digitally as long as it is affixed according to the mandates of the Information Technology Act of 2000.
The supplier must sign a GST invoice bill or a spokesperson on behalf of the supplier.
Section 116(2) allows an authorized representative to sign the GST invoice on behalf of the supplier. The authorized representative can be a company secretary, practicing advocate, chartered accountant, a retired officer of the Commercial Tax Department, or a regular employee representing the supplier.
4. Time Limit for Issuing GST Invoices
Under the current legislation, there are time frames within which the GST bills have to be issued. Here are the key GST invoice issuing time limits:
- In the case of goods supplied, the invoice must be issued on or before the delivery date or removal.
- In the case of services provided, the GST invoice bill needs to be issued within 30 days of providing the service.
- If banks or financial institutions have provided any services, the valid invoice must be issued within 45 days.
5. Number of GST Invoice Copies to Be Issued
The number of GST invoice copies issued also depends on whether goods or services have been supplied.
- In the case of the supply of goods, a GST invoice has to be issued in triplicate. It means that three copies of the GST bill have to be prepared. One is for the recipient (original one), one is for the transporter (second GST invoice copy), and the third one is stored in the supplier’s internal records (third copy).
- In the case of services, GST Act rules state that invoices must be prepared in duplicate, i.e., two copies must be made. The original copy is given to the recipient of the services, whereas the second duplicate is kept for the supplier’s internal records.
6. Personalization of GST Invoices
Organizations can make their GST tax invoices distinct and recognizable. GST bills can be personalized by organizations in the following undermentioned ways:
- It is possible to add the issuing company logo for clear brand identification.
- Including the required authorized signatory field.
- Adding the name and address details of the issuing company on the official letterhead.
Companies must follow these GST tax invoice requirements. By enforcing these rules, organizations can ensure that their GST bills are tax compliant and legally valid.
The enforcement of the GST Act has made it compulsory for registered dealers to follow the requisite GST invoice number format, rules, and regulations. It is very important to be aware of these rules so that suppliers adhere to them and do not default by providing wrong information.
Following the proper GST tax invoice requirements keeps the entire business transaction smooth and streamlined and ensures there are no legal hassles in the long run.
What is the GST Invoice Format?
The GST Act 2017 has issued very clear limitations for GST invoice formats to be used in case of preparing tax invoices.
Organizations need to be aware of the GST-compliant invoice format requirements the Government issued. Certain important fields have to be mentioned and correctly filled. Some critical elements of the GST invoice number format are mentioned below:
- The concerned parties’ details must also be distinctly mentioned in the GST tax invoice format. Each tax invoice must have a serial number as the first column.
- Each tax invoice must have a serial number as the first column. The supplier and receiver must match this serial number to ensure the seamless and hassle-free flow of credit.
- Many columns in the tax format contain mandatory details such as item description, quantity, rate per unit, and discount that has been applied.
- After all the details are mentioned, the final invoice value must be stated in words and figures.
- The shipping address, along with the terms and conditions of shipping, is also clearly stated in the invoice.
Here is a sample GST invoice bill for reference:
An inbuilt GST calculator is a handy tool to speed up the process of creating accurate and compliant invoices in the right format. The excel GST tax invoice format is available on several websites and can be modified or customized to meet the unique business requirements of an organization.
When To Issue A GST Invoice?
It is important to know when to issue a GST invoice. The GST invoice time limits vary by supply type:
1. For Goods:
- Normal Supply: Invoice must issue by removal, defined as direct collection or dispatch for delivery
- Continuous Supply: GST invoices must be issued before receiving payment or generating account statements.
2. For Services:
- General: Invoice must issue within 30 days of service
- Financial: For banks, NBFCs, and financial institutions, the invoice must issue within 45 days of service.
What Are Types Of Invoices Under GST?
There are many types of invoices under GST. Below are the other kinds of GST invoices besides tax invoices:
1. Bill of Supply
A bill of supply is like a GST invoice bill, except it excludes tax amounts. It is used when a GST-registered seller makes a taxable supply to an unregistered buyer and cannot charge GST. The bill of supply documents the transaction but omits tax details since no GST is charged or collected.
2. Aggregate Invoice
For multiple sales under INR 200 to unregistered buyers, sellers can issue a daily aggregate or bulk invoice rather than individual invoices. For example, three INR 80, INR 90, and INR 120 sales could be aggregated into a single INR 290 invoice.
Aggregate invoices simplify compliance for low-value and high-volume transactions while documenting supplies for GST records and input tax credit claims.
3. Debit & Credit Note
A seller issues a debit note to a buyer to record an increased amount payable. A vendor allocates a credit note to a buyer to record a decreased amount payable.
In conclusion, a GST invoice is a document that lists the goods and services provided by a business and the amount due to the concerned party. As per the Goods and Services Tax Act, GST-registered businesses must provide valid invoices to their clients for any goods or services sold. The invoice must contain mandatory fields like supplier name, GSTIN, address, invoice number, and date, among others.
Adhering to fair GST practices has various benefits for businesses. GST invoicing ensures compliance with government regulations and helps maintain authenticity and transparency in transactions. Streamlining invoicing procedures saves time and effort, allowing managers to focus on more strategic tasks.
Frequently Asked Questions
Yes, you can issue an invoice before services are provided. However, the issue date must be before the deadline following the service supply date.
A receipt voucher is a written receipt for sold goods or services. It is commonly used instead of a printed receipt as a handwritten, cash-based alternative. When a customer makes a cash payment, they typically receive a written receipt voucher as proof of payment. Receipt vouchers document such payments and transactions when a printed receipt is not necessary or feasible.
As a GST-registered business, you must issue GST-compliant invoices for all sales, ensuring compliance with GST regulations and facilitating seamless business transactions. In return, your GST-registered merchants will also deliver GST-compliant purchase invoices to you.
The Government allows GST invoicing relaxations for banking, goods, transportation, and passenger transport sectors. However, the specific relaxations differ for each industry.
Amaey Anand is a certified accountant with over 10 years of experience in the finance industry. He has worked with various organizations to streamline their petty cash management processes and reduce inefficiencies. He has also written several articles on financial management for leading publications such as Zensuggest and The Wall Street Journal.