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Understanding Key Information for GST Invoices

This article outlines the crucial details required for Goods and Services Tax (GST) invoices in India, as stipulated by Rule 46 of the CGST Rules. It covers 16 mandatory fields, including supplier and recipient information, HSN/SAC codes, tax rates, and values. The guide also explains special endorsements needed for export invoices, situations where a tax invoice is not mandatory, and the rules for issuing multiple copies of invoices for goods and services.

📖 2 min read read🏷️ GST Invoice

A registered entity is mandated to generate a tax invoice at or before the removal of goods for delivery to a recipient. For service provisions, GST invoices can be issued prior to, during, or even following the time of supply. Furthermore, the e-Invoicing system is progressively being implemented, introducing additional mandatory fields for compliance.

Essential Data for a GST Invoice

Rule 46 of the CGST Rules specifies the necessary components of an invoice. A tax invoice must clearly present information under the subsequent 16 categories:

  1. Supplier's name, address, and Goods and Services Tax Identification Number (GSTIN).
  2. A unique tax invoice number, up to 16 characters long, generated consecutively for the financial year.
  3. Date of invoice issuance.
  4. If the buyer is registered, their name, address, and GSTIN.
  5. If the recipient is unregistered and the transaction value surpasses INR 50,000, the invoice should include:
    • Recipient's name and address.
    • Delivery location.
    • State name and corresponding state code.
    • Note: These details are also required for values below INR 50,000 if the recipient specifically requests them.
    • For exports to an unregistered recipient with a value up to INR 50,000, the destination country's name is required.
  6. Harmonized System of Nomenclature (HSN) code for goods or Service Accounting Code (SAC) for services.
    • Since April 1, 2021, businesses with a turnover exceeding INR 5 crore must use a 6-digit HSN code for all invoices. Businesses with a turnover of INR 5 crore or less must use a 4-digit HSN code for all Business-to-Business (B2B) invoices, though this is optional for Business-to-Consumer (B2C) invoices.
  7. Description of the supplied goods or services.
  8. Quantity of goods (in numbers) and unit in Unit Quantity Code (UQC), such as meters or kilograms.
  9. Total transaction value of goods or services.
  10. Taxable value of supply after any applicable discounts.
  11. Applicable Goods and Services Tax (GST) rate, clearly itemizing CGST, SGST, IGST, UTGST, and Cess rates.
  12. Total tax amount, with a clear breakdown for CGST, SGST, IGST, UTGST, and Cess.
  13. Place of supply and the name of the destination state for inter-state transactions.
  14. Delivery address if it differs from the place of supply.
  15. Indication of whether GST is payable under the reverse charge mechanism.
  16. Signature of the supplier or their authorized representative.

Invoice Endorsements for Exports under GST

Certain GST invoices require specific endorsements, particularly for the export of goods and services, and supplies to Special Economic Zone (SEZ) units or developers for authorized operations. These endorsements depend on whether the supply is made:

  • With tax payment.
  • Without tax payment, under a bond or Letter of Undertaking (LUT).

The endorsement text varies accordingly:

  • "Supply intended for export/supply to SEZ unit or SEZ developer for authorized operations with integrated tax payment."
  • "Supply intended for export/supply to SEZ unit or SEZ developer for authorized operations under bond or letter of undertaking without integrated tax payment."

Structure of a GST Invoice

A standard tax invoice, which also serves as an e-invoice, will include all 16 mandatory fields as per GST regulations.

  • The GST Council has the authority to specify the number of HSN digits for goods or SAC digits for services that different classes of registered persons should mention, and which classes may be exempt from stating these codes.

Situations Not Requiring a Tax Invoice

A registered individual is exempt from issuing a tax invoice under specific conditions:

  • The recipient is not a registered person, and
  • The recipient does not request such an invoice.

Issuing Invoice Copies

GST Law mandates businesses to retain copies of all invoices. The requirements differ for goods and services:

Invoices for Goods Supply

Invoices must be prepared in triplicate and distinctly labeled:

  • Original Copy: For the recipient's records.
  • Duplicate Copy: For the transporter's use.
  • Triplicate Copy: For the supplier's retention.

Invoices for Services Supply

Invoices must be prepared in duplicate and distinctly labeled:

  • Original Copy: For the recipient's records.
  • Duplicate Copy: For the supplier's retention.

Frequently Asked Questions

What is GST?
GST, or Goods and Services Tax, is an indirect tax levied in India on the supply of goods and services. It is a comprehensive, multi-stage, destination-based tax that has subsumed many indirect taxes.
Who is required to register for GST?
Businesses whose aggregate turnover exceeds a specified threshold limit (which varies based on state and nature of supply) are generally required to register for GST. Certain categories of suppliers, like those involved in inter-state supply, must register irrespective of turnover.
What are the different types of GST in India?
There are four main types of GST: Central GST (CGST) and State GST (SGST) for intra-state supplies, Integrated GST (IGST) for inter-state supplies and imports, and Union Territory GST (UTGST) for supplies within Union Territories.
How does Input Tax Credit (ITC) work under GST?
Input Tax Credit (ITC) allows businesses to claim credit for the GST paid on purchases of goods and services that are used in the course or furtherance of their business. This credit can then be utilized to offset the GST payable on their outward supplies.
What is the purpose of an HSN code in GST?
The Harmonized System of Nomenclature (HSN) code is a globally recognized system for classifying goods. Under GST, it helps in systematically identifying goods and applying the correct tax rates, ensuring uniformity and simplifying trade documentation.