GST Jamku AICHAPTER VII
TAX INVOICE, CREDIT AND DEBIT NOTES
Tax invoice
Section 31(1)
A registered person supplying taxable goods shall, before or at the time of,—
(a) removal of goods for supply to the recipient, where the supply involves movement of goods; or
(b) delivery of goods or making available thereof to the recipient, in any other case,
issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed:
Provided that the Government may, on the recommendations of the Council, by notification, specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed.
Section 31(2)
A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed:
Provided that the Government may, on the recommendations of the Council, by notification,––
(a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed;
(b) subject to the condition mentioned therein, specify the categories of services in respect of which––
(i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or
(ii) tax invoice may not be issued.
Section 31(3)
Notwithstanding anything contained in sub-sections (1) and (2)—
(a) a registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him;
(b) a registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
(c) a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed:
Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
(d) a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment;
(e) where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment;
(f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
(g) a registered person who is liable to pay tax under sub-section (3) or sub- section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
Simplified Rules for Invoicing in GST
In the world of taxes and registrations, there are some rules that everyone has to follow. But, don't worry, we'll break down these rules in simple terms!
Issuing a Revised Invoice If you are a registered person, you can make changes to an invoice within one month of getting your registration certificate. Just follow the rules on how to do it.
Minimum Value for Tax Invoice You don't need to make a tax invoice if the value of what you sold is less than two hundred rupees. There are some conditions you need to meet, and there's a specific way to do this.
Exempted Goods or Services If you sell things that don't have tax or if you pay tax in a special way, you don't use a tax invoice. Instead, you use something called a bill of supply. But, similar to the previous point, if the value is less than two hundred rupees, there are conditions to follow.
Getting Money in Advance If someone pays you before you give them what they bought, you need to give them a receipt. This receipt should have specific information, as per the rules.
Changes After Receiving Advance Payment Sometimes, you might get paid in advance, but for some reason, you can't give what was promised. In this case, you can give the person who paid you a refund voucher.
Buying from Unregistered Sellers If you buy things from someone who is not registered, and you have to pay tax, you need to get an invoice from them.
Paying Tax to Unregistered Sellers When you pay tax to someone who is not registered, you need to give them a payment voucher at the time you pay.
These are the basic rules for invoicing in the world of taxes. Stick to these, and you'll be on the right track!
Section 31(4)
In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.
In the situation of an ongoing provision of goods, where there are successive statements of accounts or successive payments, the invoice must be issued before or at the time each statement is provided, or alternatively, when each payment is received.
This provision aims to ensure that invoices are timely and appropriately issued in the context of continuous supplies of goods. For such arrangements involving successive statements of accounts or payments, it becomes crucial to align the issuance of invoices with these milestones. This ensures transparency and accuracy in financial transactions, benefitting both parties involved in the supply chain.
Implementation in Practice
To comply with Section 31(4), businesses engaged in continuous supplies of goods need to establish a system that synchronizes the issuance of invoices with the regularity of statements of accounts or payments. This helps in maintaining a smooth and well-documented flow of financial transactions, preventing delays or discrepancies in the invoicing process.
By adhering to this provision, businesses contribute to the overall efficiency and reliability of the invoicing system, fostering better relationships with their clients or customers. It also aids in regulatory compliance, as the invoicing practices align with the specific requirements outlined in Section 31(4) of the relevant legislation.
Section 31(5)
Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of services,—
(a) where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;
(c) where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.
In the context of continuous service provision, certain rules govern the issuance of invoices. These rules aim to ensure clarity and transparency in payment processes. Let's delve into the specifics:
Due Date of Payment is Specified in the Contract (Clause (d) of Sub-section (3)):
If the contract specifies a due date for payment, the service provider must issue the invoice on or before this designated due date. This practice ensures that the client receives a clear billing statement in a timely manner, aligning with the agreed-upon payment schedule.
Due Date of Payment is Not Specified in the Contract:
In cases where the due date of payment is not explicitly mentioned in the contract, the service provider is required to issue the invoice either before or at the time when they receive the payment. This approach ensures that clients are promptly informed about the amount due and facilitates a smoother payment process.
Payment Linked to the Completion of an Event:
If the payment is contingent upon the completion of a specific event, the service provider must issue the invoice on or before the date when that event reaches completion. This proactive invoicing practice helps in maintaining transparency regarding the financial aspects associated with the service and ensures that clients are billed promptly after the agreed-upon event concludes.
Conclusion:
Adhering to these guidelines outlined in Section 31(5) ensures that the invoicing process for continuous services is carried out systematically, benefiting both service providers and their clients. Timely invoicing contributes to a transparent and efficient financial transaction process, fostering positive relationships between service providers and clients.
Section 31(6)
In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply made before such cessation.
In situations where the provision of services stops before the fulfillment of the entire contract, the issuance of the invoice is required at the moment the service discontinues. This invoice should cover the extent of the services provided up to the point of cessation.
Managing Incomplete Service Transactions
When a contract for services concludes prematurely, it becomes necessary to address the invoicing process in a specific manner. In such cases, the invoice must accurately reflect the services that were delivered before the cessation of the supply. This ensures clarity and transparency in financial transactions between the parties involved. Proper documentation becomes crucial to maintain a record of the services provided and the corresponding billing.
Section 31(7)
Notwithstanding anything contained in sub-section (1), where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the time of supply or six months from the date of removal, whichever is earlier.
Explanation.—For the purposes of this section, the expression "tax invoice" shall include any revised invoice issued by the supplier in respect of a supply made earlier.
In this section, we explore the provisions of Section 31(7) which address the issuance of invoices for goods sent on approval for sale or return, taking into consideration certain conditions.
Conditions for Invoicing
Despite the content outlined in sub-section (1), when goods are sent or taken on approval for sale or return and are removed before the actual supply occurs, there are specific conditions regarding the issuance of invoices. The invoice must be issued either before or at the time of supply, or within six months from the date of removal, whichever comes earlier.
Explanation of "Tax Invoice"
For the purpose of this section, it's essential to understand the term "tax invoice." This includes not only the original invoice but also any revised invoice issued by the supplier concerning a supply made earlier. This broader definition ensures that all relevant documentation is considered within the scope of this section.
Conclusion
In conclusion, Section 31(7) lays out the guidelines for invoicing in cases where goods are sent on approval for sale or return. Adhering to these conditions ensures proper documentation and compliance with the specified timeframes.