Hello, in this post we will discuss about tax invoice. As a GST registered dealer, you have to generate a tax invoice or a bill of supply. We will cover the following.
- What is Tax-Invoice?
- Tax-invoice VS Bill of Supply VS Pro forma Invoice
- Importance of tax invoice
- Invoice format – Information to be shown
- Invoice format in PDF
What is a Tax-Invoice or GST Invoice?
A tax-invoice or a bill is a commercial instrument where a list of goods sent and services provided by the GST registered seller to the buyer for the amount due for payment.
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||Bill of supply is given by the seller 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:
- supporting a registered person’s claim for the deduction of GST (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 particular financial year.
- GST tax invoice is an essential document for the recipient to avail Input Tax Credit (ITC)
- A registered person cannot avail ITC unless he is in possession of a tax
invoice or debit note.
Invoice Format – Information to be shown
- 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 financial year)
- 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
- The quantity of goods (number) and unit (metre, kg etc.)
- The total value of the supply of goods/services
- The Taxable value of supply after adjusting any discount
- The applicable rate of GST (Rates of CGST, SGST, IGST, UTGST, and cess clearly 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 is different 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
This ends the post. Let us know your opinion by commenting below.