GST Invoicing

There are various reasons why issuing invoice under GST is extremely important.

1. Proof of Supply
   Invoice acts as a proof of supply of goods and services by a registered person under GST. It forms the basis on which a supplier can demand payment from the buyer of such goods and services.
2. Claiming ITC
   Invoice is important under GST as it is a document based on which the recipient claims ITC for the inputs purchased by him. This means that a recipient cannot claim ITC till the time he does not have a tax invoice or a debit note with him.
3. Time of Supply
   Invoice is issued at the time of the supply of goods or services. GST is charged at the time of supply of goods or services. Further, invoice is issued at the time of supply of goods or services. It is one of the factors that indicates time of supply. This is because time of supply is nothing but the date on which the invoice is issued or the date on which the payment is received, whichever is earlier.

Now, let’s have a look at the various types of invoices are issued at the time of supply of goods or services.

1.Tax Invoice
An invoice is a commercial document that a supplier of goods or services issues to the recipient in a given transaction. Such a document indicates the names of the parties involved as well as the details of goods or services supplied under a given transaction. These details include the:

• product name
• description
• quantity of goods or services sold
• details of the supplier and the purchaser
• terms of supply
• date of supply
• price of each good sold or service rendered
• discount

2. Bill of Supply
Bill of Supply is a type of invoice issued by a registered person supplying exempted goods as well as the person registered under the composition scheme in GST. As per the CGST Act, 2017, every registered person supplying exempted goods or services or paying taxes under the Composition Scheme is required to issue a bill of supply in place of tax invoice.

3. Receipt Voucher/Refund Voucher In Case of Receipt of Advance Payment
As per the law, any registered person who receives an advance payment for the supply of goods or services must issue a receipt voucher. This is nothing but a document that is a proof of receipt of such an advance payment. The receipt voucher contains details which are prescribed in the invoice rules under the law.
Further, say the supplier subsequently does not supply the goods or the services against the receipt voucher so issued. In this case, such a registered supplier who has already received the advance payment is required to issue a refund voucher for such a payment receipt.

Further, as per the invoice rules, if at the time of receiving the advance payment:

• the rate of tax is not determined, the tax is paid at the rate of 18%
• Nature of supply is not determined, it shall be taken as inter-state supply

4. Invoice and Payment Voucher To Be Issued By The Person Required To Pay Tax On Reverse Charge Basis
As per the law, any registered person who receives an advance payment for the supply of goods or services must issue a receipt voucher. This is nothing but a document that is a proof of receipt of such an advance payment. The receipt voucher contains details which are prescribed in the invoice rules under the law.
Further, say the supplier subsequently does not supply the goods or the services against the receipt voucher so issued. In this case, such a registered supplier who has already received the advance payment is required to issue a refund voucher for such a payment receipt.

Further, as per the invoice rules, if at the time of receiving the advance payment:

• the rate of tax is not determined, the tax is paid at the rate of 18%
• Nature of supply is not determined, it shall be taken as inter-state supply

5. Invoice In Case of Continuous Supply of Goods and Services
There are cases where goods are supplied on continuous basis. Such continuous supply of goods involves successive statements of accounts or successive payments. In these cases, invoice is issued before or at a time each such statement is issued or each such payment is received by the supplier.

In case of continuous supply of services:

• The invoice is issued on or before the due date of the payment. Provided such a due date can be determined from the contract.
• Invoice is issued on or at the time of receipt of payment by the supplier for services rendered. Provided the due date for the payment cannot be ascertained from the contract.
• The invoice is issued on or before the date of completion of work. Provided the payment is associated with the completion of the work.

6. Issue of Invoice in Cases Where The Supply of Services Terminate
Invoices in case where supply of services terminate under a contract before the actual completion of the supply.
There are cases where supply of services terminate under a contract before the actual completion of such a supply. In such situations, invoice must be issued at a time when such a supply terminates. Furthermore, the invoice is issued for the period for which the services were rendered before such termination.