GST has brought many changes in the economy of India. All the accounting procedures, billings of sale, purchase, and the rates on goods and services are affected by the GST. The changes in GST rates of goods and services are creating the problem of invoice of goods and services that are being sold or purchased. Its important to have a particular format for creating an invoice in GST.
Although there is no particular format prescribed by government but some particulars are prescribed which should be in an invoice.
Invoice :-
The invoice or bill is the list of goods and services that are being provided to the customers or consumers. As per the new particulars under GST, the rates of GST are being charged on the list of goods and services along with the amount due for the payment. The GST number are being provided by the government, which should be mentioned on the invoice or bill and also used in filling the returns for the GST. Also by this procedure there is ease of filing the GST returns and it also help consumers or customers to identify the rates on goods and services.
Effect of GST in supply chain of business
Fields in invoices under GST :-
- Invoice number and date
- Customer name
- Shipping and billing address
- Customer and taxpayer’s GSTIN (if registered)**
- Place of supply
- HSN code/ SAC code
- Item details i.e. description, quantity (number), unit (meter, kg etc.), total value
- Taxable value and discounts
- Rate and amount of taxes i.e. CGST/ SGST/ IGST
- Whether GST is payable on reverse charge basis
- Signature of the supplier
**If the recipient is not registered And the value is more than Rs. 50,000 then the invoice should carry:
- name and address of the recipient,
- address of delivery,
- state name and state code
Sample of invoice under GST :-
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- Name and Address
In the invoice, the major piece of information is the name and address of the firm. Also keeping in mind that you use the same name and address on the business which is linked with the GST number. No other address should be used.
- GSTIN/GST Number
The number is provided by the government to ensure that you are a registered business. In India, this alpha-numeric is 15-digits long with the first two digits representing the state code followed by the PAN number of the taxpayer.
Requirement of GST Registration in India
- GST 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.
- Date of GST Invoice
The date of sale or purchase of goods and services are mentioned on invoice.
- Recipient Details in GST Invoice
You’re required to include the name, Address, GSTIN , 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.
GST CMP-08 Form Date extended, Notification released
- HSN Code or SAC
HSN (Harmonized System of Nomenclature) is the internationally product coding system that is used to maintain the uniformity in classification of goods. SAC stands for Service Accounting Codes and are adopted by the Central Board of Excise and Customs (CBEC) for identification of the services that one provided.
HSN and SAC to declared only above this limit
- Description of Goods or Description of Services
The description of goods and services are specified on the invoice. There should be proper information of the goods and services.
- Total Value of Sales and Taxable Value of Sales
The value of sales and the taxable value of sales should be clearly mentioned and clearly separated on the invoice. If there is a discount or abatement, this can be accounted prior to mentioning the total value of sales.
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- Rate of GST
The rate of GST should be mentioned on the invoice, as there is 4 tier tax structure(5%,12%,18%,28%). So as per the item the tax rate should be mentioned on the invoice.
- 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.
Easy way to understand Reverse Charge Mechanism and its Updated List
- Terms of Payment Details
GST invoice should contain the payment details that how(method of payment) a person is going to pay.
- Signature of the Supplier
The invoice should contain the signature of the supplier or authorized signatory. A digital signatory can also be used.
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The author of above article is Sameer Batra, BBA Professional.
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