Creating GST compliant invoice

Here's some good info from a friend on creating a compliant GST invoice:

1. Mandatory fields your invoice should have

Issuing and receiving a GST-compliant invoice is a prerequisite to claim input tax credit (ITC) under the new regime. If a taxpayer does not issue such invoices, their customers, too, will not be able to claim ITC. Your invoice must have the following fields:

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 (metre, 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:

i. name and address of the recipient,

ii. address of delivery,

iii. state name and state code

You can look up the applicable HSN code for your products.

2. Personalization
you can personalize your invoice with your logo, watermark and other features.

3. Rules for invoicing - B2B

Assuming that both businesses are registered dealers, it is very important to mention the GSTIN (Goods and Services Tax Identification Number) of the buyer in the invoice.

If you are dealing with an unregistered dealer, you will need to create a self-invoice. Normally, you would create an invoice for any transaction regardless of the value of transaction. But for unregistered dealers, the per day threshold limit for creating invoices is INR 5,000. So, if you purchase taxable commodities from an unregistered dealer, you can create a consolidated invoice when the transaction value equals or exceeds INR 5,000 per day from any one or all unregistered suppliers. The consolidated invoice can be created at the end of a month. When selling to unregistered dealers, the threshold limit above which you have to issue an invoice is INR 200.

For example, a company paid INR 6,000 in one day to various small shopkeepers for snacks, tea, pens, cleaning supplies etc. The company has to pay tax on reverse charge basis on these purchases since the value exceeds INR 5,000.

Again, let’s take the example of a registered garment shop which sells garments to both retailers and end consumers. When selling to end customers (unregistered) who don’t request for invoices, the shopkeeper will issue a consolidated tax invoice for such supplies at the close of each day. Any sales over INR 200, even to unregistered persons, require a tax invoice.

4. Rules for invoicing - B2C

For a transaction between the business and end consumer, i.e. B2C transactions, where the buyer is unregistered, GSTIN number of the buyer (end consumer) is not required.

You will also need to ensure that you provide a proper breakup of the taxes charged (CGST, SGST, IGST) and the rates thereof.

5. Issuing invoices - When and How?

The GST law has defined the time limit for issue of GST tax invoices, revised bills, debit notes and credit note. Following are the due dates for issuing an invoice:

Supply of Goods (Normal case) - On or before date of removal/ delivery
Supply of Goods (Continuous Supply) - On or before date of issue of account statement/ payment
Supply of Services (General case) - within 30 days of supply of services
Supply of Services (Banks & NBFCs) - within 45 days of supply of services
For example, a garment manufacturer sells garments to retailers. On the 10th of July, the manufacturer sells goods worth Rs. 1,00,000 to a local retailer, and sends them out for delivery on 11th July. The manufacturer must therefore issue an invoice by the 11th of July, as that is the day the goods were removed from the factory and delivered to the recipient.

Now, let’s say the manufacturer's delivery vehicle breaks down and is serviced on 12th July by a mechanic from a service center. Since this is a supply of service, the invoice for the same must be furnished within 30 days i.e. by the 10th of August (in this case).

6. Uploading invoices on time

You can upload invoices for filing returns concurrently or at the end of the month before you file the GSTR-1 return form. Word to the wise, it is better to do it concurrently so that invoices do not pile up at the end of the month and you do not have to worry about last-minute issues and reconciliations.

7. Invoicing for Composition Scheme and exempt goods

A dealer registered as a normal taxpayer, under the Composition Scheme, or one who deals in exempt goods cannot claim ITC on the sale of such goods. These dealers will not issue a tax invoice to their customers, but instead create a bill of supply. A bill of supply is a document of transaction that is different from a normal tax invoice. These bills do not contain any tax amount, as input tax cannot be charged in these cases.

The bill of supply should include the following:

Your name, address, and GSTIN
Date of issue
Serial number
Description of the goods and services involved
The total value of the goods and services
HSN code (in case of goods) or Accounting code (in case of services)
Your Signature (either digital or non-digital)
In case of exports, which is exempt from GST, the bill of supply must also contain a declaration about the GST paid. The bill has to carry the text, “Supply Meant For Export On Payment Of IGST” if the IGST has been paid, or “Supply Meant For Export Under Bond Or Letter Of Undertaking Without Payment Of IGST” in the other case.

When billing for exports, the following details related to the buyer are mandatory to be filled in:

Name and address of the buyer
Delivery address
Destination country
Number and date of application for removal of goods for export
8. Revising an incorrect invoice

If you end up issuing an incorrect invoice, do not worry. There are ways to fix this, too. If the price of the commodity decreases, you can issue a Credit Note to your buyer and refund the extra amount to your customer. If the prices increase, a Debit Note needs to be issued in which case the customer will have to pay the extra amount.

In the first case (when the prices decrease), you can claim refund of excess tax paid if your customer, too, revises their ITC returns.

9. Filing GSTR-3B

The GSTR-3B is a return form that will be filed for the period of July and August. The government has recently relaxed the rules for filing regular returns for the first two months and released this simplified GSTR-3B. Every GST registrant needs to file his return on self-assessment basis for the first two months i.e July and August. These return forms have to be filed by 20th of next month. Simultaneously, the taxpayer has to file the GSTR-1 for the month of July on or before September 5; an extension of 25 days has been extended for the month of July. For the month of August, this extension is limited to a period of 10 days. Once GSTR-1 is filed, GSTR-2 and GSTR-3 will auto-populate with information furnished under GSTR-1. Eventually, this GSTR-3 will be matched against GSTR-3B and any difference will be refunded or needs to be paid as the case may be. However, no penalty or late fees will be charged on the difference. more