Whenever goods or services are bought and sold, a bill of sale needs to be created. As per current rules, if such goods or services are included in the GST (Goods and Services Tax) Act, this type of bill is termed as a GST Invoice. For sellers, creating and sending a GST Invoice to the buyer, is a necessary part of compliance with the GST rules regimes which was implemented across India on 1st July, 2017.
When to create GST Invoice?
In case you are a GST registered business i.e. a business that has a valid GSTIN (GST Identification Number), you are mandatorily required to create and provide your customers with a GST Invoice for sales of any goods or services. Similarly in case you are purchasing goods and services from GST registered vendors, you will receive GST compliant invoices from them.
GST Invoice Format
As per rules specified under the GST Act, to correctly create an invoice under GST rules, it needs to mandatorily have the following fields:
- Date and Invoice number
- Name of Customer
- Billing Address and Shipping Address of customer
- GSTIN of Tax payer and Customer (if registered)
- Place of supply
- HSN Code (Harmonised System of Nomenclature Code)
- Quantity, description or other relevant item measure/details
- Taxable value/applicable discount
- GST rates and total GST charged including details of applicable CGST/SGST/IGST for the item
- Signature of the supplier.
Know Latest GST Rates to create GST compliant Invoices
The following is a Sample Format for GST Invoice*:
*The above GST invoice format shown is for illustrative purposes only.
GST Format in Excel
The GST Invoice format may be available as an excel document for use whenever a new GST-complaint invoice is to be generated. In some cases, excel GST format features an inbuilt GST calculator that helps you speed up the process of creating GST compliant invoices. Free excel GST Format is available from a variety of websites and can be modified according to the unique requirements of each GST registered company.
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GST Invoice Software
With the advent of GST a number of companies have introduced GST software that automatically prepares invoices according to GST rules for the users after some key data have been provided. Many of these GST compliant invoice preparatory software are available as part of standard tax preparatory software packages. However, most GST invoice software are not free and a license fee is required for its use.
Common Ways to Personalize GST Invoices
Invoices created using GST rules can be personalized in the following ways:
- Adding the issuing company logo
- Including authorized signatory field
- Adding issuing company name and address in the letterhead
Time Limit for Issuing Invoices under GST
Under existing rules, there are specific time periods during which GST Invoices have to be mandatorily issued. The following are the key GST invoice issuing time limits that one needs to keep in mind:
- In case of goods supplied, you need to issue GST Invoice on or before date of removal/delivery.
- In case of services provided, you are required to provide GST Invoice within 30 days of providing the service.
- If services have been provided by banks and NBFCs, they are required to issue a valid invoice under GST within 45 days of providing the service.
Number of GST Invoice Copies to be Issued
The number of GST Invoice copies that are to be issued varies depending on whether goods or services are being supplied:
- In case of goods being supplied, invoices have to be issued in triplicate i.e. 3 copies. One for the recipient (original), one for the transporter (duplicate) and one for the supplier’s records (second duplicate).
- In case of services, GST rules specify that invoices have to be issued in duplicate i.e. 2 copies. One for the recipient of the services (original) and another for the supplier’s records (duplicate).
GST Invoice Rules: Salient Features
As a GST invoice can only be created by a GST registered business, businesses complying with other taxation rules such as composition tax are not required to issue GST compliant invoices. In such cases, current GST invoice rules suggest that the seller needs provide one of the alternatives to GST invoice.
Common Invoicing Alternatives under GST
Some of the alternatives to invoice are as follows:
- Bill of Supply – Issued by GST registered businesses in case of GST exempt goods/services are provided or business is registered under composition tax rules.
- Consolidated tax invoice – This type of alternative bill of sale may be issued in B2C transactions if value of goods/services supplied is less than Rs. 200.
- Receipt voucher – This type of invoice is issued when a GST registered business receives an advance payment from a customer in lieu of goods/services to be provided at a future date.