Tax invoice [section 23]

Tax invoice is Heart and Soul of GST and runs through its entire system of levy, collection and assessment of tax (through self-assessed Returns and/or details and otherwise) and, inter alia, in that:

• A Registered taxable person charges and collects tax through issue of Tax invoice;
• Determine tax payable on supplies;
• Avail and use eligible input tax credit; and
• Details therein could be a base for:
  • furnishing details of outward supplies; &
  • furnishing details of inward supplies;
  • for furnishing Returns.

Thus, it would be a Sole or all in one document that could meet with requirements of various compliances (of collecting, payment and furnishing details).

Model law and Rules provide for preparation of invoice and related requirements. It does not provide for any specific "form"; however, lists requirements having regard to nature of supply and/or supplier.

Those requirements are explained through Suggested Draft of Tax Invoice and based thereon other illustrative invoices in respect of goods and/or services and in different circumstances and they are as follows:

• Supply of goods
• Supply of services
• Exports
• Revised or Supplementary
• Input service distributor
• Banking company or Financial institution or Non-banking financial company
• Goods transport agency
• Passenger transport service

Further, Law provides for details and particulars in respect of Bill of material or debit note or credit note [section 24] and the like documents; they are explained through Illustrative invoices referred earlier.

Law requires production of document for verification while goods are in transit. To facilitate that, Invoice Rules provide an option to RTP to obtain "Invoice reference number" from Common Portal by uploading Tax invoice issued by him, through Form GST INV-1 [prescribed by Formats under Goods and Service tax-Invoice Rules].

Particulars prescribed are self-explanatory and listed in Illustrative formats.

Apart from requirements stipulated for GST purpose, an invoice may include certain other details as required commercially or by any other applicable provision of law (possible details are indicated in Suggested Tax invoice).

Needless to say that to prepare Invoice, certain basic information about recipient, classification of goods or services, classification of transaction and the like would be necessary. Appropriate classification of goods or services and their respective codes would be of paramount importance. Transaction classification would determine nature of tax payable (intrastate or interstate). (Dealt with earlier or will be dealt with later).

While designing and devising format as well as system for compiling relevant information and uploading thereof, care may have to be taken, inter alia, in respect of:

• Purchaser (or recipient) and its details including whether registered or not;
• Appropriate serial number (which may be designed having regard to the nature of transaction, like, goods or service; interstate or intrastate; financial year to which it relates, for classification of information as may be required including for returns and details);
• Nature and Rate of tax; and
• All particular, as prescribed, are given.

A Valid Tax Invoice is a must for claiming ITC.

A Complete Tax Invoice is a must for:

• Furnishing details;
• Furnishing Return;
• Establishing its veracity; and
• Discharging obligation under law.
• Facility for uploading of data.

Timely preparation and issue are inevitable for timely compliance including regular uploading of supply details (to avoid last minute hassles).

With regards,
In the Service of Tax Payers
Team, Instavat.

• ¹ Can be issued only by Registered Taxable Person (RTP)
• ² By RTP For supply of taxable goods/services
• ³ Serial no.
• Should be 'alpha-numerical.'
• A3427-1617 not Permitted ('-' not alpha numerical).
• Unique for a Financial year.
• ⁴ Should be date of issue; date of preparation and issue could be different?

The above are minimum particulars required by Law/Rules. Other Particulars, if any, may be incorporated.⁵

¹ Invoice for Service shall be issued within 30 days from date of supply and for continuous supply within 30 days of date of event as per contract, obliging payment. In case of Banking/NBFC, Period- 45 days.

² HSN- Harmonious System of Nomenclature Code - If required, as per Notification. (Number of digits to be notified; as per Return Rules: Not mandatory, if aggregate turnover < Rs 1.5 crore; if it is > Rs 1.5 crore and < Rs 5 crore, 2 digit; if it is > Rs 5 crore, 4 digit; if exports, 8 digit.

³ Accounting Service Code  if required, as per Notification. As per return Rules: Not mandatory, if aggregate turnover < Rs 1.5 crore.

⁴ Prima facie code of unit of measure, like: Bottles  code BTL; kilogram - code kgs, etc. However, Law does not clarify that

⁵ Illustrative list Additional Details which may be incorporated in Tax Invoice

(It's as such not essential it may be incorporated in commercial Invoice, if separately prepared.)

• Telephone No.
• Email id
• PAN
• Sr. No. of item in Description
• Rate
• Bill to
• Ship to
• Customer PO. NO & Date
• Payment terms
  • Credit period
  • Mode of Payment
  • Interest
• Other terms & Conditions
• Special instructions, if any
• E & OE.

The above are minimum particulars required by Law/Rules. Other Particulars, if any, may be incorporated.

The above are minimum particulars required by Law/Rules. Other Particulars, if any, may be incorporated.

Endorsement as follows
SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST
or
SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST

• The above are minimum particulars required by Law/Rules. Other Particulars, if any, may be incorporated.
• Changes from Suggested Tax Invoice highlighted.

Serial number and date of corresponding Tax invoice/ Bill of supply

The above are minimum particulars required by Law/Rules. Other Particulars, if any, may be incorporated.

Serial number and date of corresponding Tax invoice/ Bill of supply

• RTP to issue (whether registration effective from earlier date than RC date) for period effective date to RC date.
• Consolidated, for intrastate supplies during entire period to an unregistered Recipient permitted; If interstate supplies, to all unregistered Recipients located in a state, value not exceeding Rs. 250000/-, Consolidate Revised Tax Invoice permitted.