Your Go-To Guide for GST Invoices

In July 2017, the Goods and Services Tax (GST) was implemented as a solution to the ever-increasing and cascading effect of the taxes under the previous tax structure that was put in place.

Considering the amount of confusion around transactions, it is vital to have a tax reporting structure that consists of a record of all the transaction details from start to finish. If you are a business or service provider, you will need to follow a reporting system with the GST invoice format in place. This article will take you through the fundamentals of the GST invoice.

What is GST?

Before we get to the GST invoice format and so forth, it is critical that we know a thing or two about GST. GST is an Indirect Tax implemented in place of a plethora of Indirect Taxes in India. In a nutshell, the GST is an Indirect Tax levied on the supply of goods and services in the entire country.

What is a GST Invoice?

A GST invoice refers to a list of provided goods or services along with the compensation that needs to be made. If you have done an online GST registration for your business, you will be required to provide GST-compliant invoices to your clients to buy or sell goods or services.

Why do you need a GST Invoice?

Suppliers generally notify the buyers of the need to make the necessary payments through a GST invoice. Additionally, a GST invoice supports your claim for the Input Tax Credit (ITC) of the incurred GST. Here are a few more reasons why a GST invoice is essential:

  • You need a GST invoice to determine the address of delivery.
  • To pinpoint the precise time of the supply of goods and services.
  • To apply the goods and services tax if there is a change in the GST tax rate.
  • To find out the value of the services or goods in question.

Which fields of a GST Invoice do you need to Submit?

If you have undergone the GST registration process for your business, you will have to provide your clients with a GST invoice to ensure your transactions are transparent. Here are the fields you will have to fill out:

  • Name of the customer
  • GST Invoice number and the date it was issued
  • The GST number of the customer
  • Location of supply
  • The customer’s shipping and billing address
  • The tax amount and rate
  • If reverse charge under GST is applicable
  • Details of the item being shipped, including quantity, product description, unit, and the total value
  • Any applicable taxable discounts
  • The Harmonized System of Nomenclature (HSN) code or the Service Accounting Code (SAC)
  • Signature of supplier

How do I issue a GST Invoice for the Supply of Goods?

Be sure to issue a GST invoice in the following scenarios:

  • During the removal of goods when the supply of goods involves their movement.
  • When goods are delivered to a recipient and the supply of goods does not require the movement of goods.
  • When an account payment is issued, and there is a continuous supply

Which copies of the GST Invoice are required for Goods?

Here are the three copies of the GST invoice that need to be issued for goods:

Original invoice

You issue the original GST invoice to the receiver and mark it as ‘Original for recipient.’

Duplicate copy

You issue the duplicate copy to the transporter and mark this copy as ‘Duplicate for transporter.’

Triplicate copy

The supplier retains this copy and marks it as ‘Triplicate for supplier.’

When do you not need to issue a GST Invoice?

Keep in mind that you do not have to issue a GST invoice if the services or goods in question are valued at less than Rs.200 in the following scenarios:

  • If the recipient is not registered
  • If the recipient does not need an invoice

GST E-Invoicing

The widespread generation of fake GST invoices led India to implement GST E-invoicing. Contrary to popular belief, the E-invoice does not need to be generated on the GST portal. GST invoices need to be created through billing or accounting software. Be sure to use an Enterprise Resource Planning (ERP) software, create the JSON file, and upload it on to the portal to prepare your GST invoice. The Invoice Registration Portal (IRP) will then confirm its authenticity and sign the E-invoice.

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