GST Invoice is a document issued by a supplier/seller or a service provider to the buyer of goods or recipient of services. Every taxpayer registered under GST needs to provide GST-compliant invoices to their clients for the sale of goods and services.
Let’s understand the format of a GST invoice, it’s importance and types of GST invoices in detail.
Format of a GST invoice
A GST invoice must have the following details:
- Unique invoice number and date of issue of invoice
- Customer name
- Shipping and billing address details
- Taxpayers’ and customers’ GSTIN (if registered under GST)
- Full details of supply and delivery locations
- HSN code for goods and SAC code for services
- Description of the items dispatched (it could be details of goods or services).
- Net value of goods and services plus specifying quantity
- GST rates plus tax amount segregated into CGST/IGST/SGST
- Reverse charge if applicable
- Discounts if any
- Handwritten or digital signature
If your recipient is not registered under GST and the invoice value exceeds Rs 50,000, then the invoice should include the following details as well:
- Name and address of the recipient
- Delivery address
- Name of the state and state code
You can use Razorpay Invoices to create and send GST-compliant invoices to your customers and accept payments instantly. You can create, update, cancel and delete invoices from your dashboard. These GST invoices can also be saved as templates for your future reference.
If you’re wondering how to include profit margins and to get real-time GST inclusive and exclusive rates you can check out our free GST calculator.
Timeline to issue GST invoices
Under the GST law, there are certain specific timelines to issue GST invoices, revised bills, credit notes or debit notes to a concerned person.
Here are certain due dates for issuing a GST invoice to your customers:
- For goods (normal supply) – On or before the date of removal of goods or their delivery
- For goods under continuous supply- On or before the date of issue of account statement/payment
- For general services – Within 30 days of supply of services
- For services provided by banks and NBFCs – Within 45 days of supply of services
Importance of issuing GST invoices
GST invoices play a very significant role for the businesses registered under GST. Here are the reasons why issuing an invoice under GST is very crucial:
- Proof of supply: A GST invoice acts as a proof of supply of goods and services by a registered supplier. A supplier can demand his payment on the basis of such proof of supply
- To claim tax paid on purchases (input tax credit): An invoice is a document based on which a recipient can claim the credit of taxes paid for purchases i.e. ITC. To claim ITC, the recipients should have a GST invoice or a debit note
- Time of supply: Since a GST invoice is issued at the time of supply of goods and services, it is one of the factors that indicates time of supply. Based on the time of supply, the GST rate is applied to the goods and services
Types of GST invoices
- Normal tax invoice (Commonly called as GST invoice) – It is a commercial document that a supplier issues to his recipient at the time of supply of goods or services. We have already discussed the mandatory fields required in a GST invoice in this article earlier.
- Bill of supply – This is also a type of GST invoice issued by a registered person supplying exempted goods and the person opted for GST composition scheme. The bill of supply does not include any GST amount as the supplier cannot collect GST from the buyer/recipient.
- Invoice-cum-bill of supply: In case a registered person is supplying taxable as well as exempted goods to an unregistered person, then he will have to issue “Invoice-cum-bill of supply”.
- Debit note: A seller issues a debit note when the amount payable by the buyer to seller increases. Here are the situations when such amount payable rises:
- The taxable value mentioned in the invoice is lower that should have been charged
- The tax amount given in the invoice is lower that should have been calculated
- Credit note: A seller issues a credit note where the invoice value reduces. Here are the situations when such value decreases:
- The taxable value mentioned in the invoice is higher that should have been charged
- The tax amount given in the invoice is higher that should have been calculated
- Buyer returns the goods to the seller
- Services provided are found be deficient
How many copies of invoices should be issued?
When it comes to transactions involving goods, the supplier must issue an original invoice to the recipient of the goods. A duplicate copy of the invoice would be lodged with the person responsible for transporting the goods from the supply point to the destination (transporter). A third copy of the invoice remains with the supplier.
When it comes to services, the supplier holds the duplicate copy of the invoice and sends the original to the recipient of service.
So now that you know everything about a GST invoice, you can create GST-compliant invoices by using Razorpay Invoices with ease. With a highly intuitive dashboard, you can create invoices, share them and update them easily. Onboarding a new client is much simpler and you don’t have to wait for the customer’s ID to be verified and added.