A GST invoice is a receipt of items or services delivered that a seller issues to its buyer. It basically contains the basic details such as the name and quantity of items along with their total due prices. Here is a complete guide on GST invoice to help you understand how a GST invoice works and how it is generated!
A GST invoice is a receipt that contains the details of items along with their amounts.
Understanding GST Bill Format
Contents
A GST invoice is usually checked to determine the prices of said items or services before SGST, IGST or CGST is charged on them. Further, it also displays the total amount of taxes imposed on each service or product.
The GST bill format is simple but it is very important to follow. Here are all the necessary details that should be there is a GST invoice :
- Buyer’s Name
- Invoice Number
- Date of Issue
- Shipping and Billing Addresses
- GSTIN Number of Buyer as well as Seller
- Supply Information (Supply Address, SAC and HSN Code)
- Complete details of items or services issued.
- Tax value
- Signature of the seller
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When Should You Create and Issue a GST Invoice?
Usually, a GST invoice is created and shipped along with the supplies. But in certain cases, creating a GST invoice immediately after shipping the products or services can be a bit challenging. Therefore, to simplify such matters, the government has defined a time limit that should be followed by the suppliers. Here is what it looks like :
On Normal Goods
The registered suppliers need to generate a GST invoice on or prior to the date of removal of items in question. Under Section 2 (96) of the CGST Act, removal of goods means any one of the following :
- Goods collected from the seller by the buyer or an authorized person of the buyer.
- Goods shipped for delivery at customer’s premises.
On Goods Subjected to Continuous Supply
If a supplier maintains a constant business relationship with the customer, then the GST invoice can be issued on or before the account statement is generated or the amount is received.
On Services
In the case of services, the GST bill needs to be issued within 1 month or 30 days of providing the services.
On NBFC/Bank Services
In the case of financial services provided by any institution or bank, the time limit for issuing the GST bill is 45 days from the date of providing the service(s).
How Many Copies of Invoices Should Be Created?
For Goods Supply
In the scenario of generating a GST invoice for goods, the issuer should create a total of three copies, each for the following members that are involved in the transaction :
- Original copy for the customer.
- Duplicate copy for the transporters and other individuals responsible for transporting the goods from seller to buyer.
- Triplicate copy for the supplier himself.
For Services Supply
Because there are no intermediaries like transporter or shipper involved in the transaction, the issuer only needs to generate two copies of the GST invoice:
- Original copy for the recipient
- Duplicate copy for the service provider himself.
Rules of a GST Invoice
There is no surprising fact that only GST registered businesses or services are entitled to create a GST bill or invoice. A business that comes under different taxation rules and regulations can not issue a GST bill.
Under the situations where businesses aren’t entitled to come within different taxation rules, such organizations can use different invoices.
Following are some Dos and Don’ts in terms of creating and issuing a GST invoice :
Dos
- Always keep an eye on every item you sell or purchase and check the details of products or services with the ones mentioned in the invoice.
- Make sure that you charge GST that comes under the right tax segment /slab.
- Always issue a tax inclusive invoice on all the taxable goods and services.
- Match the payment break up with that of the amount mentioned in the invoice.
- Follow the right GST bill format
Don’ts
- Avoid purchasing goods or requesting services from unregistered dealers and service providers. Taking the services of such dealers will eliminate your chances for claim return or exchange for your received goods.
- Keep track of the serial number that you’re mentioning in your invoice.
- If you receive a prepaid invoice, request a credit note instead of cancelling the invoice altogether.
- Avoid shipping your products with the original copy of the Invoice, because it might get lost in the transition.
So, this was all about the GST invoicing. You’ve learned what is a GST invoice, why and when it is created, the right GST bill format along with the Dos and Don’ts one must follow while dealing with GST invoices. As a final piece of advice, follow the right format and use the right invoicing software for making the most accurate GST bills.