An invoice or a bill is a list of goods sent or services provided, along with the amount due for payment.
B. Who should issue a GST Invoice?
If you are a GST registered business, you need to provide GST-complaint invoices to your clients for sale of good and/or services. Your GST registered vendors will provide GST-compliant purchase invoices to you.
C. How many copies of Invoices should be issued?
For goods– 3 copies For services– 2 copies
Now that you’re registered, here are 15 tips on preparing your GST tax invoice:
1. Name and Address
Like a sales invoice, the first piece of information that you need to include is your business name and address. Make sure that you use the same address that you registered to obtain your GST number with. If you have multiple offices in different states, then use the address that’s on your registration.
2. GST/GSTIN Number
This is the alpha-numeric number that was assigned to you. It’s needed to verify that you’re registered. In India, this number is 15-digits long with the first two digits representing the state code followed by the PAN number of the taxpayer.
3. GST Tax Invoice Number
Like a regular invoice, you’ll need a consecutive serial number that contains only alphabets and/or numerals that is unique to that specific invoice.
4. Date of GST Invoice
This is simply the date that the GST tax invoice was issued. In most cases, this is within 30 days from the date that the service was supplied.
5. Recipient Details in GST Invoice
You’re required to include the name, Address, GST/GSTIN number, and the address of the customer. In countries like India, you’ll also have to include the name of the State they’re located and its code.
6. HSN Code or SAC Code
HSN is the abbreviation for Harmonized System of Nomenclature and is the internationally accepted product coding system that is used to maintain uniformity in the classification of goods. SAC stands for Service Accounting Codes and is adopted by the Central Board of Excise and Customs (CBEC) for identification of the services that you provided.
7. Description of Goods or Description of Services
Like a sales invoice, you also need to list a description of the goods or services provided and the quantity sold.
8. Total Value of Sales and Taxable Value of Sales
One of the most important components of a GST tax invoice is both the total value of sales and taxable value of sales. They need to be clearly and separated on the invoice. If there is a discount or abatement, this can be accounted for prior to mentioning the total value of sales.
9. Rate of GST
This is a 4-tier tax structure that will vary depending on the transaction. For example, essential items, like food, won’t be taxed, while luxury items like luxury cars will tax the highest rate.
10. Amount of GST Charged
The type of supply, where the supply is made, and who the supply is made to will determine the GST rate. However, in countries like Australia, the GST rate is 10%. So, if your invoice is $100, then the calculated GST would be $10. There are handy GST calculators, like this one for Canada and this for India, that can assist you in determining the amount of GST you have to charge.
11. Tax Payable on Reverse Charges
If GST is payable on reverse charges, then you need to clearly mention this as ‘GST PAID ON REVERSE CHARGES’ in the GST Invoice.
12. Revised Invoice
If GST Invoice is a revised, this information also has to be clearly mentioned as ‘REVISED INVOICE’ in the GST Tax Invoice. Typically, the Invoice Number will remain the same as the one issued on the original invoice with the updated changes. If you’ve made any changes in the invoice number or date this also to be mentioned.
13. Supplementary Invoice
If the GST Invoice is a supplementary invoice to the previously issued Invoice, then you need to include ‘SUPPLEMENTARY INVOICE’ to the invoice number.
14. Terms of Payment Details
Similar to a sales invoice, a GTS tax invoice should also contain payment details like how you’re going to be paid and when the due date of the invoice.
15. Signature of the Supplier
A GST Tax Invoice has to be signed by the supplier, or at least an authorized signatory. A digital signature can also be used.
FAQs on Invoice
Q1. What’s the difference between invoice date and due date?
Invoice date refers to the date when the invoice is created on the bill-book, while the due date is when the payment is due on the invoice.
Q2. How to issue an invoice under reverse charge?
In case of GST payable under reverse charge, on you must additionally mention that tax is paid on a reverse charge, on the GST invoice.
Q3. Is it mandatory to maintain invoice serial number?
Yes, invoice serial number must be maintained strictly. You may change the format by providing a written intimating the GST department officer along with reasons for the same.
Q4. Can I digitally sign my invoice through DSC?
Yes, you can digitally sign invoice through DSC.
If you’re a business owner, then it’s in your best interest to register for a GST number since it improves tax systems by making them more efficient, effective, and transparent. As such, you may also be required to generate GST tax invoices. It may sound complicated, but it’s actually similar to a sales invoice. And, if you follow the tips listed above, then preparing a GST tax invoice should be a breeze.
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