Before we get down to the rules that govern GST invoices, we must first understand what a GST invoice is. A GST invoice is a document which is supposed to contain all the relevant details of a business transaction and both the parties involved. It must comprise of the product name, description, quantity, details of the supplier and the purchaser, terms of sale, rate charged, discounts, etc.
The different types of invoices and supporting documents under GST are:
- Sales invoices
- Purchase invoices
- Bill of supply
- Delivery challans (for supply on approval, supply of liquid gas, job work and others)
- Credit notes
- Debit notes
- Advance receipts
- Refund vouchers
The GST Invoice Rule(s), 2016 primarily ask for two kinds of invoices – Tax Invoice and Bill of Supply.
A tax invoice is a document, which is issued when a taxable person, supplies any product or service to someone.
All invoices issued by businesses under the GST should contain these 16 points:
- Name, address and GSTIN of the supplier.
- A consecutive serial number not exceeding 16 characters, in one or multiple series, containing alphabets or numerals or special characters (hyphen or dash and slash symbolised as “-” and “/” respectively) and any combination thereof, unique for a financial year.
- Date of its issue.
- Name, address and GSTIN or UIN, if registered, of the recipient.
- Name and address of the recipient and the address of delivery, along with the name of state and its code, if such recipient is unregistered and where the value of taxable supply is Rs 50,000 or more.
- HSN Code of goods or Accounting Code of services.
- Description of goods or services.
- Quantity, in case of goods and unit or Unique Quantity Code thereof.
- Total value of supply of goods or services or both.
- Taxable value of supply of goods or services or both, taking into account discount or abatement, if any.
- Rate of tax (central tax, state tax, integrated tax, union territory tax or cess).
- Amount of tax charged in respect of taxable goods or services (central tax, state tax, integrated tax, union territory tax or cess).
- Place of supply along with the name of state, in case of a supply in the course of inter-state trade or commerce.
- Address of delivery where the same is different from the place of supply.
- Whether the tax is payable on reverse charge basis.
- Signature or digital signature of the supplier or his authorized representative.
Bill of supply
One of the primary motives of a tax invoice is to charge tax from the purchaser on the government’s behalf. However, there are some exceptions to this in GST, since a supplier cannot charge tax and thus, a normal tax invoice cannot be issued. In such cases, the document that is to be issued is called a Bill of Supply. A Bill of Supply is similar to a tax invoice, except that the Bill of Supply does not contain any tax amount, as the seller cannot charge GST to the buyer.
A bill of supply is issued in cases where tax cannot be charged, for example:
- The registered person is selling exempted goods/services.
- The registered person has opted for a composition scheme.
- The party is unregistered.