The art of invoicing in a GST-regime
The trick is in minute detailing!
An invoice is the document which lists goods and services provided with statement of the sum due. It is required to keep a record of sales and purchases in the book of accounts. With the GST regime having kicked in, all businesses need to start issuing invoices under the GST mode. A GST invoice is similar to a sales invoice but different in the information it needs to contain. We take a look at how to create a GST invoice.
First, let us take a look at what all information a GST invoice must include:
Name, address and GSTIN of supplier
When you register for GST you will get a unique 15-digit tax identification number. This is known as the Goods and Services Tax Identification Number (GSTIN). The address you provide should be the address you have registered with to obtain your GST number.
Type of invoice - tax invoice, supplementary invoice or revised invoice
Apart from a normal tax invoice, other types of invoices also may need to be issued. When a deficiency has been found in an invoice, a supplementary tax invoice needs to be issued. For invoices issued in the time period between date of implementation of GST and date of issue of the registration certificate, dealers need to issue a revised invoice against the invoice already issued. The type of invoice needs to be clearly mentioned.
This needs to be consecutive serial number. It could be in one or multiple series, containing alphabets or numerals or special characters. This number is specific to that specific invoice.
Date of issue
This is the date on which the GST invoice was issued. In most cases it is within a period of 30 days from the date the services were supplied.
Name, address and GSTIN or UIN (if registered) of recipient
You have to also know the GSTIN of the entity you are doing business with. Certain special entities will have a Unique Identification Number (UIN) number instead.
HSN or SAC code for goods or services
HSN and SAC codes are used to classify goods and services under the GST regime. Each good and service will have a different code and a corresponding rate associated with it.
Description of goods or services
Quantity and unit of goods or services
Total value of supply of goods or services
Taxable value of goods and services or both
The government has stipulated GST tax rates for items belonging to different categories. This needs need to be mentioned in the invoice for every item. If there is any discount or abatement, these need to be accounted. Total value and taxable value of goods and services need to be clearly separated in the invoice.
Tax amount of CGST (Central GST), SGST (State GST) or IGST (Integrated GST)
Central and state GST is levied on the intra-state supply of goods and services. On inter-state supply of goods and services or on imports, IGST is levied. These need to be showed in separate columns.
Place of supply and name of State, in case of supply in the course of inter-State trade or commerce
Address of delivery (if different from the place of supply)
Whether the tax is paid on reverse charge basis
There is a provision of reverse charge under GST. Say a vendor who is not registered under GST supplies goods to a person who is registered. In that case GST has to be paid by the receiver. If this is the case, it needs to be mentioned in the invoice.
Signature (or digital signature) of the supplier or an authorized person
With all this information in hand, a GST invoice can be issued. The format of a GST invoice can be found here. While manual invoices can be generated, it is recommended to use a software for the same. Zoho, Tally, ClearTax are common software that can be used.
What kind of challenges have you faced while filing an invoice? Please share your views.