What is GST Invoice? Check Bill Format, Components & Rules
Last Updated on December 4, 2024
Goods and Services or GST has revolutionised the tax structure in India by consolidating multiple indirect taxes into a unified system. Section 31 of the CGST ACT, 2017 of the Goods and Services Tax (GST) regime mandates the issuance of invoices or bills of supply for every good or service sold. A GST invoice is an important document that serves as proof of a transaction, including the price, tax rates, and other essential information that complies with GST laws. There are different types of invoices as well issued under certain circumstances. In this article, we will cover all the information regarding a GST invoice, its components, types, and rules.
What is a GST Invoice?
A GST invoice is a formal document that serves as a record or bill/receipt for the sale of goods or services. The GST invoice is generated by the supplier or seller for the buyer and contains important transaction details, such as the invoice number, quantity, GST number, GST rates, etc. A GST invoice also serves as a transaction record and can be used by the buyers to claim an Input Tax Credit.
What are the Components of a GST Invoice?
A GST Invoice consists of a list of information about the seller and the buyer. Below, we have listed down all of the important components of the GST Invoice along with their description.
| Field | Description |
| Invoice Number | A unique identifier number is issued for the invoice. |
| Invoice Date | The date on which the invoice is issued. |
| Details of the Seller | Name, address, GSTIN, and other credentials about the seller. |
| Details of the Buyer | Name, address, GSTIN, and other credentials about the buyer. |
| Information of Goods/Services | Description of the items sold or services provided. |
| Quantity | Quantity of goods or services provided. |
| Rate | Per unit price of the goods or services. |
| Amount | Total amount for each item (quantity x rate). |
| HSN Code | Harmonized System of Nomenclature code for goods. |
| Amount of GST | Amount of GST charged on each item. |
| Total Amount | Total amount to be paid, including the GST amount. |
| Rate of GST | The GST rate applicable for each item (e.g., 5%, 12%, 18%, or 28%). |
| Destination | Location where the supply of goods or services takes place. |
| Terms for Payment | Terms and conditions for payment. |
| Signature/Digital Signature | Authorised signatory’s signature or digital signature. |
Example of a GST Invoice Format
Here is an example of how your GST Invoice would look like.
| Field | Example Entry |
| Invoice Number | INV001234 |
| Date | 29-Nov-2024 |
| Supplier Name & GSTIN | ABC Pvt Ltd, 29ABCDE1234F1Z5 |
| Recipient Name & GSTIN | XYZ Traders, 27FGHIJ5678K2Z7 |
| Description | Industrial Safety Shoes, HSN: 6401 |
| Quantity & Unit Price | 50 pairs @ ₹500 each |
| CGST (9%) | ₹2,250 |
| SGST (9%) | ₹2,250 |
| Total Value | ₹55,000 (including ₹4,500 GST) |
When Should a GST Invoice Be Issued?
According to the GST Act, there is a particular time for issuing GST Invoices based on the nature of the transaction or type of supply:
- For the normal supply of goods, the invoice must be issued before delivery, and for a continuous supply of goods (when goods are sold regularly to the same buyer), it should be issued before each payment.
- For Services (general), the invoice must be issued within 30 days after service provision. Also, for banks & NBFC services, it should be issued within 45 days.
Rules of Issuing GST Invoice
There are several rules that need to be followed when issuing a GST Invoice. Now that we know what a GST Invoice is, let’s delve into the rules for issuing a GST invoice.
- Reverse Charge Invoice: When a GST-registered buyer buys from an unregistered seller, a reverse charge invoice is issued. This GST invoice is a reverse charge invoice created by the buyer to document the purchase.
- Receipt Voucher: This voucher is issued when the payment is made in advance, i.e. before delivery of the goods or services. This is done to keep records of the payment, and its compliance with GST rules is mandatory.
- Delivery Challan: This invoice or challan should be issued when certain types of deliveries are being made. These include:
- Goods Sent on Approval: A delivery challan should be issued if any goods are sent for approval or on a return basis.
- Exhibitions: A delivery challan should be issued when certain goods are sent out of the country for exhibitions or events. This ensures that the goods are for display, not sale.
- Job Work: A delivery challan should be issued when there is a supply of goods for job work, such as when sending components for assembly or processing.
- Unknown Quantities: A delivery challan should be issued when the quantity of goods is uncertain. For example, supply of liquid gas or gases.
Types of Invoices
Under GST, there are different types of invoices to suit varied transaction needs:
- Tax Invoice: Issued when taxable goods or services are supplied.
- Bill of Supply: Issued when supplying exempt goods or services or by composition scheme taxpayers who are not eligible to charge GST.
- Revised Invoice: Issued when corrections are required in the original invoice.
- Receipt Voucher: Issued as proof of receipt of advance payment against a supply.
- Refund Voucher: Issued when the advance payment is refunded due to the cancellation of an order.
- Debit and Credit Note: A debit note is issued when the price of a good or service is increased, and a credit note is issued when the price of a good or service is decreased. In both cases, the invoice is issued by the seller.
When is a Tax Invoice Not Required?
The issuing of a GST Invoice is not mandatory for goods and supplies under the following circumstances:
- When the value of goods and supply is under Rs 200.
- It is received by an unregistered taxpayer.
- When the invoice is not required by the recipient.
Tax Invoice: Copies for Goods Supply
For the supply of goods, three copies of the tax invoice must be issued:
Original: This original copy is provided to the buyer and is used for claiming the Input Tax Credit (ITC).
Duplicate: The duplicate copy is carried by the transporter to ensure compliance during the transit of goods.
Triplicate: This triplicate copy is retained by the supplier for internal records and audits.
Tax Invoice: Copies for Services Supply
In the case of services, only two copies of the tax invoice are required:
Original: The original copy is issued to the buyer to claim ITC or keep for record purposes.
Duplicate: The duplicate copy is retained by the service provider for compliance and record-keeping.
Conclusion
A GST invoice is an essential document and cornerstone of India’s taxation system. A GST invoice is proof of transparency and easy tax compliance nationwide. The invoice can also be used to claim input tax credits and maintain records of sales and purchases. At Industrybuying, we simplify the invoicing process for B2B transactions. Whether you are buying office supplies, industrial tools or business essentials, we ensure all your transactions are GST-compliant so that you can claim GST benefits as well.
