Billing under GST - A detailed look

Billing under GST – A detailed look

An overview of billing under GST

What is the GST bill (Invoice)?

A GST invoice is like a receipt that shows what you bought from a seller or service provider. It lists the things you got and how much you need to pay for them. You can look at the prices of items before they add the CGST and SGST taxes.

The invoice also shows how much Tax you pay for each thing you buy.

Who will issue the GST Bill ?

If you run a GST-registered business, you must give your clients invoices that follow GST rules for the things you sell.

Your vendors, who are also registered for GST, will give you invoices compliant with GST rules for the things you buy.

What are the mandatory fields in the GST bill?

A tax invoice is typically used to apply taxes and transfer the benefit of input tax credit. A GST Invoice should include the following important information:

  • Invoice number and date
  • Customer’s name
  • Shipping and billing addresses
  • Customer and taxpayer’s GSTIN (if registered)
  • Place of supply
  • HSN code/SAC code
  • Item details: description, quantity, unit (e.g., meter, kg), total value
  • Taxable value and any discounts
  • Tax rates and amounts, such as CGST, SGST, or IGST
  • Indication if GST is payable on a reverse charge basis
  • Supplier’s signature

If the recipient of the invoice is not registered for GST and the invoice value is over Rs. 50,000, the invoice should also include:

  • Name and address of the recipient
  • Delivery address
  • State name and state code

When Should the GST bill be issued ?

The time limit to issue a GST bill, revised bill, Debit note, or Credit note is defined in the GST Act. Accordingly, the due dates to issue the bill to the customer are as follows:

Type of Sales

Due time

Goods (General sales)

On or before date of removal/delivery

Goods (Continuous Supply)

On or before date of issue of account statement/payment

Services (General)

Within 30 days of supply of services

Services (Banks and NBFCs)

Within 45 days of supply of services

What are the types of bills Available ?

a. Bill of Supply:

A bill of supply is like a GST invoice, but it doesn’t include any tax amount because the seller isn’t allowed to charge GST to the buyer. It’s used in situations where Tax can’t be added:

  • When a registered person sells exempted goods or services.
  • When a registered person has chosen the composition scheme.

b. Aggregate Invoice:

If the total value of multiple invoices is less than Rs. 200 and the buyer is unregistered, the seller can issue a single combined invoice for all those invoices on a daily basis. For example, if you’ve issued three invoices in a day totaling Rs. 290 (Rs. 80 + Rs. 90 + Rs. 120), you can issue a single invoice for Rs. 290, called an aggregate invoice.

c. Reverse Charge Invoice:

If a taxpayer is required to pay Tax under the Reverse Charge Mechanism (RCM), they need to issue an invoice for the goods or services they’ve received. The invoice should clearly state that Tax is being paid under RCM. Additionally, a payment voucher should be issued when making the payment to the supplier.

d. Debit and Credit Note:

A debit note is given by the seller when the amount the buyer owes them increases. This can happen when:

  • The tax invoice has a lower taxable value than it should.
  • The tax invoice has a lower tax amount than it should.

A credit note is provided by the seller when the value of the invoice decreases. This can occur if:

  • The tax invoice has a higher taxable value than it should.
  • The tax invoice has a higher tax amount than it should.
  • The buyer returns goods to the supplier.
  • Services provided were deficient in some way.

How many copies of the GST bill have to be issued ?

For Goods sales – 3 Copies

  • Original for Recipient
  • Duplicate for Transporter
  • Triplicate for Supplier

For Services – 2 Copies

  • Original for Recipient
  • Duplicate for Supplier

Credit and debit note

What are the books of accounts & records to be maintained under GST?

Under every tax law, there is a necessity to maintain proper books, records, and accounts that will facilitate the assessment and collection of duty as stipulated under the law. Every person providing taxable service shall issue an invoice, a bill, or, as the case may be, a challan, signed by such person.

Records normally maintained under other laws acceptable:

  • A company registered under the Companies Act must actively maintain proper books of accounts and records as specified in the Companies Act.
  • An assessee, who is required to pay income tax, is also required to maintain certain books and records under the Income-tax Act. (Cashbook, Journal, Ledger, Bills, etc.)
  • According to Sales Tax Law Labor Law, certain books, records, registers, accounts, and returns have to be maintained.

Some of the other major records to be maintained are:

  • Correspondence files with the customers/ Client
  • Correspondence files/ records with the supplier.
  • Documents with agreements
  • Records of invoices issued to customers/clients
  • Files with challans
  • Credit notes, Debit notes, etc.

The importance of doing all the above is:

  • Have all taxable services been accounted for accurately?
  • Is the tax calculation accurate?
  • Has the value of the taxable service been correctly determined?
  • Was the calculated tax paid to the government as required?

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FAQs on Invoice

1. What's the distinction between the invoice date and the due date?

Ans: The invoice date signifies the day when we generate the bill, whereas the due date indicates the payment deadline mentioned on the invoice.

2. How do you make a reverse charge GST invoice?

Ans: When paying GST under the reverse charge system, ensure that you mention on the invoice that you are paying the tax through reverse charge.

3.Can I digitally sign my invoice using a DSC?

Ans: Absolutely, you can use a Digital Signature Certificate (DSC) to sign your invoice digitally.

4. Do I have to keep the invoice serial number?

Ans: Yes, you must keep the invoice serial number in order. If you need to change the format, inform the GST department officer in writing and explain why you want to make the change.