GST Invoicing Made Easy

The primary responsibility of any business owner is to invoice the customers precisely for the goods or services issued. Businesses around the world create a goods & services Tax (GST) invoice for the product or service sold. India, recently shifted to the GST regime.

GST is a destination based, transaction-value wise reporting structure. It is aimed at bringing multiple tax levies under the ambit of GST statute, so that across India, a unified tax structure is followed.

This article provides crucial information on how to create the invoice, the line items that must be present in the invoice, the format and other such information so that filing a GST return can be a breeze.

When to create a GST Invoice

Under the GST regime, a transaction is defined as ‘Supply’ when there is any form of transfer or exchange of goods and services. Every time a transaction takes place, an invoice needs to be created, at the time of occurrence of the transaction or within a prescribed time limit. Every taxpayer registered with the GST network is required to adhere to this norm and raise a tax invoice for supply of goods and services. Three different invoices need to be created for supply of goods, one for the recipient, a duplicate for the transporter and the third for the supplier. In case of services, one for the recipient and one for the supplier is prepared.

How to create a GST Invoice

The Government of India has come up with a simple format for preparing the GST invoice.

Irrespective of the type of business, the business should first register for a GST number.

Preparing a GST invoice can look like a long cumbersome process, but it is fairly simple. Let us see how

1. Name and Address of the supplier – The first and foremost information to be supplied is the business name and the address as given at the time of GST registration.

2. GSTIN of the supplier – This is the number that was assigned to the business at the time of registration. This is a unique 15-digit number, where the first 2 digits represent the state followed by the PAN number of the taxpayer.

3. Tax Invoice Number – This is a serial number and unique for the specific invoice.

4. Invoice Date – Date the invoice was issued, likely 30 days from the date the goods or service was supplied.

5. Name, Address and GSTIN of the Recipient – Name, contact details along with the state code and GSTIN number of the receiver of goods/services.

6. HSN /SAC Code – HSN stands for Harmonized System of Nomenclature – Internationally accepted product coding system for uniform classification of goods. Similarly, SAC – Standard Accounting Codes provide identification of services as accepted by Central Board of Excise and Customs (CBEC).

7. Description of goods/services – Description along with the quantity supplied.

8. Total value of goods/services – Total value of sales and taxable value of sales specified separately. A discount or a rebate has to be accounted for before arriving at the total value.

9. Tax Rates – Rate of tax as applicable.

10. Amount of GST charged – CGST, SGST should be shown separately.

11. Reverse charges – For any GST payable on reverse charges (GST paid by receiver rather than supplier), the invoice should carry a note as ‘GST PAID ON REVERSE CHARGES’

12. Supplementary Invoice / Debit Note – If there is an increase in the price of goods or services that was supplied earlier, and if this chargeable under GST, a supplementary invoice is to be raised for the difference within 30 days of the revision in prices.

13. Revised invoice – In case of a reversed GST invoice, the invoice has to carry a clear note as ‘REVISED INVOICE’

14. Payment terms – Payment details - how and when the payment will be made.

15. Signature of the supplier – Physical signature of the supplier or authorised signatory or a digital signature.

GST is the most significant reform in recent times as it aims to create a One Nation, One Tax model. Businesses should be diligent in preparing the GST invoices and keep the accounts in order. GST compliant invoices are also a mandatory requirement to file GST return. Despite the initial teething issues, GST is the path forward, ready to transform India.

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