Invoice Rules under GST Section 31
Provisions under Section 31 of CGST Act, 2017
Contents of Rule Section 31 outlines- the requirements for issuing tax
invoices under different scenarios. A registered person supplying taxable goods
must issue a tax invoice before or at the time of goods removal (if movement is
involved) or delivery (if not). The invoice must detail the description,
quantity, value, and tax charged, along with other prescribed particulars. For
services, the invoice can be issued before or after service provision but
within a prescribed period. Exceptions are made for specific categories of goods
and services, allowing for alternate documentation or exemption from invoice
issuance, as prescribed by the government.
Certain conditions apply to tax invoices: revised invoices
can be issued within a month of registration; no invoice is required for supplies
under ₹200 unless otherwise specified; and a bill of supply replaces a tax
invoice for exempted supplies or composition tax payers. Receipt and refund
vouchers are required for advance payments and subsequent non-supplies.
Registered persons receiving supplies from unregistered suppliers must issue
self-invoices and payment vouchers.
For continuous supplies, invoices are issued based on
payment milestones, due dates, or event completion. Supplies ceasing
mid-contract require invoices for completed portions. Goods sent on approval
must have invoices within six months or upon supply.
Contents of Rule Section 31 can be understood by following
1. Tax Invoice
Section 31(1) mandates that a registered taxable person must
issue a tax invoice when making a taxable supply of goods or services. The
invoice must be issued before or at the time of:
- Removal of goods (where movement is involved), or
- Delivery or making goods available to the recipient (in cases with no movement).
- For services, the invoice must be issued:
- Within 30 days from the date of supply of services (45 days for banking, financial, or NBFCs).
2. Bill of Supply
Section 31(3)(c) specifies that a Bill of Supply is issued
instead of a tax invoice when supplying exempt goods or services or when the
supplier is under the composition scheme.
3. Revised Invoice
As per Section 31(3)(a), if a taxable person has supplied goods
or services before obtaining GST registration, they must issue a revised
invoice within one month of the issuance of the registration certificate.
4. Receipt Voucher and Refund Voucher
Section 31(3)(d) and 31(3)(e) require the issuance of:
- Receipt Voucher: For advances received for goods or services.
- Refund Voucher: For refunds against advances when the supply is not made.
5. Debit Note and Credit Note
Section 31(3)(f) and (g) provide for:
- Debit Note: Issued when there is an increase in taxable value or tax charged.
- Credit Note: Issued for a reduction in taxable value or tax charged.
Mandatory Contents of a Tax Invoice (Rule 46)
As per Rule 46 of the CGST Rules, 2017, a tax invoice must
include the following details:
- -Name, address, and GSTIN of the supplier.
- -Unique invoice number (consecutive and unique for each financial year).
- -Date of issue.
- -Name, address, and GSTIN/Unique ID of the recipient (if registered).
- -Description of goods or services.
- -HSN code or SAC (as applicable).
- -Quantity (for goods).
- -Value of supply (rate-wise).
- -Taxable value and applicable GST (CGST, SGST, IGST).
- -Place of supply (if it is an inter-state supply).
- -Signature or digital signature of the supplier.
Latest Amendments and Notifications
1. E-Invoicing Applicability:
-The government has mandated e-invoicing for businesses with
aggregate turnover exceeding Rs. 5 crore from 1st August 2023 (Notification No.
10/2023-Central Tax).
- E-invoices must be generated through the Invoice Registration Portal (IRP).
2. QR Code on B2C Invoices:
-Businesses with an aggregate turnover exceeding Rs. 500
crore must include a dynamic QR code on B2C invoices to facilitate digital
payments (Notification No. 14/2020-Central Tax).
3. Amendment for HSN Codes:
-Mandatory reporting of 6-digit or 8-digit HSN codes on
invoices based on turnover thresholds (Notification No. 78/2020-Central Tax).
4. Time Limit for Credit Notes:
- Credit notes for a financial year can now be issued up to 30th November of the subsequent financial year (Finance Act, 2022 amendment).
Important Circulars
- Circular No. 123/42/2019-GST: Provides clarification regarding the issuance of tax invoices in case of continuous supply of services.
- Circular No. 137/07/2020-GST: Clarifies invoicing requirements for transactions involving banking and NBFCs.
Scenarios and Practical Examples
Scenario 1: Supply of Goods
Situation: ABC Traders, a registered supplier in
Maharashtra, sells goods worth Rs. 1,00,000 to XYZ Pvt. Ltd. in Karnataka.
Required Actions:
- Since it is an inter-state supply, IGST is applicable.
- ABC Traders must issue a tax invoice with all mandatory details, including the place of supply (Karnataka).
- E-invoicing is mandatory if ABC Traders’ turnover exceeds Rs. 5 crore.
Invoice Example:
- Invoice No.: 001
- Date: 01-Jan-2025
- Supplier: ABC Traders, GSTIN: 27XXXXX1234XY1
- Recipient: XYZ Pvt. Ltd., GSTIN: 23XXXXX5678XXZ
- Description: Electronic Goods
- HSN Code: 8542
- Quantity: 10
- Rate: Rs. 1000/unit
- Taxable Value: Rs. 2,00,000
- IGST @18%: Rs. 36,000
- Total: Rs. 2,36,000
Scenario 2: Advance Payment for Services
Situation: ABC Consultancy receives an advance of Rs. 50,000
for legal advisory services.
Required Actions:
- ABC Consultancy must issue a receipt voucher at the time of receiving the advance.
- Once services are rendered, a tax invoice must be issued, adjusting the advance.
Scenario 3: Issuance of Debit Note
Situation: A supplier issues an invoice for Rs. 1,00,000 but
later discovers that the taxable value was undercharged by Rs. 20,000.
Required Actions:
- A debit note must be issued for the additional Rs. 20,000 taxable value, along with applicable GST.
Penalties for Non-Compliance
Failure to comply with GST invoicing rules can result in
penalties, including:
- Rs. 10,000 or an amount equivalent to the tax evaded (whichever is higher).
- Denial of input tax credit (ITC) to the recipient due to improper invoices.
Conclusion
Proper adherence to the rules of invoicing under GST Section31 is important for businesses to ensure compliance and avoid penalties. With regular updates in GST laws, taxpayers must know the amendments and notifications. Businesses are encouraged to use automated invoicing systems in order to meet their statutory obligations with the provision of e-invoicing and dynamic QR codes.