Hello, in this post we will discuss on the tax invoice. As a GST registered dealer, you have to generate a tax invoice or a bill of supply.
We will cover the following topics:
- What is Tax-Invoice?
- Tax-invoice VS Bill of Supply VS Pro forma Invoice
- Importance of tax invoice
- Invoice format
- Invoice format in PDF
What is a Tax-Invoice or GST Invoice?
A tax-invoice or a bill is a legal document containing a list of goods and services provided by the GST registered seller/dealer to the buyer/purchaser along with the amount due for payment. If the purchaser is not the consumer (the end user) then the seller needs to issue a tax invoice. If the goods / service is sold to a consumer, then the seller needs to issue a retail invoice.
Tax invoices are not a receipt, they are both different documents. Invoice is a request made by the seller for payment the sale of goods/services to the customer. It will have prices, credits, discounts, taxes and total amount.
Receipt is a proof document, which shows that payment has been made. It is a proof of ownership and lists goods/ services, prices, credits, discount, taxes, total amount paid and payment method.
Tax- invoice VS Bill of Supply VS Pro forma Invoice
|Tax Invoice||Bill of Supply||Proforma Invoice|
|Businesses registered under GST must issue the tax invoice on all sales||Business registered under Composition scheme will issue the bill of supply instead of a tax invoice on sales||Preliminary Invoice for the goods/services in advance to the delivery.|
|It is a Bill sent by the seller to the buyer||The seller gives Bill of supply to the customer||It Is an estimated invoice sent by a seller to a buyer.|
|This is issued before the payment is made||Issued in case of exempted sales or sales by composition dealer||Is issued in advance of a shipment or delivery of goods.|
|This is given for both local and central transactions||This is given only for local transactions||Given along with a quotation or for customs purposes in the importation|
|Tax Amount is shown on the invoice||No taxes to be shown on the bill||This invoice cannot be considered for demand or request for payment|
Importance of Tax Invoice under the GST regime
It is very important for the effective operation of the GST system. It is evidence for:
- Support a registered person’s claim for the GST deduction(input tax) incurred on his / her standard-rated purchases.
- Trigger the time of supply as the invoice date will determine when GST is to be accounted for by a registered person on the supply of goods and services (accounting on invoice basis);
- Determining which supplies made by him/her should be included in a particular taxable period.
- Determine when he may claim his input tax based on the tax invoice received from his supplier.
- It is compulsory to mention the GSTIN of the supplier in the tax invoice along with the serial number which is unique for that FY.
- GST tax invoice is an essential document for the recipient to avail Input Tax Credit (ITC)
- A registered person cannot avail ITC unless he has a tax invoice or debit note.
- Name, address, and GSTIN of the supplier
- Tax invoice number (it must be generated consecutively and each tax invoice will have a unique number for that FY)
- Date of issue.
- If the buyer (recipient) is registered, then the name, address, and GSTIN of the recipient.
- If the recipient is not registered and the bill value is more than Rs. 50,000 then the invoice should carry:
- Name and address of the recipient,
- Address of delivery,
- State name and state code.
- HSN code of goods or accounting code of services*
- Description of the goods/services.
- Quantity of goods (number) and unit (metre, kg etc.)
- Total value of the supply of goods/services.
- The Taxable value of supply after adjusting any discount.
- GST applicable rate (Rates of CGST, SGST, IGST, UTGST, and cess is mentioned)
- Amount of tax (with the breakup of amounts of CGST, SGST, IGST, UTGST, and cess)
- Place of supply and name of destination state for inter-state sales.
- Delivery address if it differs from the place of supply.
- Whether GST is payable on the reverse charge basis.
- Signature of the supplier.
- HSN Code:
- Turnover of less than 1.5 crores- HSN code is not required.
- The Turnover between 1.5 -5 crores can use 2-digit HSN code.
- Turnover above 5 crores must use 4-digit HSN code.
Download the Invoice format pdf
With that, we end this post on the tax invoice. Let us know your opinion by commenting below.