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In the simplest terms, an invoice bill can be understood as a document that can be found in both hard and soft copies. It consists of some important details related to the transaction such as the details of the supply/purchase, registration no. like VAT, UIN, Service tax, and names of the supplier/purchaser. Some other details present in an invoice bill are the name and quantity of the item along with the rate of tax and tax amount. There is a general format available for the invoice and any other specific format is not required.

On the other hand, a GST purchase bill or invoice is a type of invoice that is obtained by entities that have a GSTIN or a Goods and Service Tax Identification Number. A GST purchase invoice specifies the details like tax rate and amount of the tax for sales and purchases that take place interstate or intrastate. In the event that any sales or purchases take place, it becomes crucial to complete a CGST or SGST bifurcation. However, when a sales takes place at the inter-state level, IGST shall be applied.

Introduction to GST Purchase Bill

GST purchase bills are sent out to the buyers for the assessment of their purchases. A GST purchase invoice or bill is generated when any purchase is made. The bill is supposed to consist of some crucial details like the name of the buyer and the GSTIN to ensure that the assessee can receive their cenvat credit. When a seller submits their sales register (GSTR-1), the buyer’s account will instantly receive credit for GST. A significant difference can be found between the due date and the invoice date. The primary distinction between the two is that the invoice date refers to the date on which the invoice was registered in the bill book, whereas the due date is the day on which the payment of the invoice is due.

However, this does not mean that the invoice date is not important. And, for some rigorous reasons, it is also stated that the serial number of the invoice is also crucial for maintenance. For instance, if the serial number of an invoice is INV015, then a similar GST invoice format must be maintained. 

Format of GST Invoice Bill

There are high chances that the format of a GST invoice bill might vary from one provider to another. Thus, it is crucial to know that a GST invoice bill is not incorrect just because it is different from the one you had before. However, it is important to note that there is some information that must be included in a GST invoice bill. The details on the given invoices can be compared to determine if any of them are inappropriate. An invoice provided by a seller can be compared with the GST invoice sample to determine its appropriateness. If the GST invoice bill has all the required details filled then it can be considered valid; however, if all fields are not available then the validity of the vendor might need to be verified. The next crucial piece of information you should know is when these invoices are supposed to be released after the basic template of the bill has been verified.

Also Read: Billing Innovation: Transform Your Invoices with Our GST Format in Word and Excel

GST Bill Format Sample

Government of India/State
Department of …………………
Form GST INV –1
(See Rule ——–)
Application for Electronic Reference Number of an Invoice
1. GSTIN
2. Name
3. Address
4. Serial No. of Invoice
Details of Receiver (Billed to)

Name

Address

State

State Code

GSTIN/Unique ID

Details of Consignee (Shipped to)

Name

Address

State

State Code

GSTIN/Unique ID

Sr. NoDescription of GoodsHSNQty.UnitRate (per item)TotalDiscountTaxable valueCGSTSGSTIGST
Rate | Amt.Rate | Amt.Rate | Amt.
Freight

Insurance

Packing and Forwarding Charges

Total
Total Invoice Value (In figure)

Total Invoice Value (In Words)

Amount of Tax subject to Reverse Charges

Declaration:Signature
SignatoryName of the Designation/Status
Electronic Reference NumberDate-

Guidelines to Generate GST Purchase Bill As Per the Indian Govt. 

The following are some important GST billing guidelines suggested by the government of India that must be taken care of when generating a GST purchase invoice:

  • Required Fields Must be Completed on Your GST Purchase Invoice 

It is vital to fill the required fields with the accurate information. Some of the crucial fields that are mandatory to be filled in the GST purchase invoice are the name of the customer, date, and number of invoice, address of shipping and billing, GSTIN of the taxpayer, HSN code, and place of supply. It is important to properly consider all the fields when creating the invoice as they are going to be critical in the future. 

  • The Date of Invoice and Due Date of the Invoice Must be Filled in Correctly

It is suggested that caution must be exercised when entering the date of invoice and due date of the invoice as both of them can be confused to be the same. However, both are different and have their own importance. While the date of the invoice is the date on which the invoice was prepared, the due date of the invoice refers to the date when the invoice must be paid. Therefore, it is crucial that both the dates of the invoice and the due date of the invoice are filled in carefully and correctly. 

  • Maintain the Serial Number of the Invoice

Keeping track of the serial number of the invoice becomes critical as it can be used for reference in the future. In situations, when the taxpayer needs to modify the format of the invoice, they can contact the tax department and include the serial number of the invoice in their notification. 

Understanding GST Purchase Bill Components

To ensure compliance, it is essential that all records are maintained accurately. As per the regulations of the government, failing to issue a GST invoice that is compliant might lead to penalties. For this reason, it becomes crucial that every GST invoice contains the following components:

  1. Name of the Customer
  2. Number and Date of Invoice
  3. Address of Shipping and Billing
  4. Place of Supply
  5. GSTIN of the taxpayer and the customer if they are registered
  6. Signature of the supplier
  7. If the GST is payable on the basis of reverse charge
  8. Rate of taxes and tax amount, i.e. CGST/IGST/SGST
  9. Taxable value and discounts
  10. Details of item such as the quantity, description, unit, and total value
  11. SAC code or HSN code

In case when the recipient of the invoice is not registered and the value exceeds INR 50,000, the following are the components that need to be included:

  1. Name of the recipient
  2. Address of the recipient
  3. Name of state
  4. Code of state
  5. Delivery address

Prescribed GST Invoice Format

We may refer to Section 31 for information on what should be included in a valid tax invoice in accordance with Section 2(66) of the Central Goods and Services Tax Act of 2017. Although this section offers a broad guideline, it does not contain precise details or limit us to physical invoices; electronic versions are acceptable as well. As a result, your GST invoices should all adhere to the standards listed in Section 31, whether you use paper or digital documents.

Also Read: What Is The Standard Format For A Tax Invoice?

Rules for GST Invoice

The applicable rules and regulations must be thoroughly comprehended to ensure GST compliance.

The lowest amount for which a Goods and Services Tax (GST) invoice may be issued:

  • There is no need to issue a tax invoice when the total value of the supplied goods and services is less than INR 200.
  • If the recipient is an unregistered individual, the GST is not issued. 
  • There is a need to issue an invoice if requested by the recipient; however, if not requested the invoice might not be issued.

In the end, there is no requirement for issuing separate invoices for all the goods and services and an aggregate statement or a consolidated tax invoice can be created from the compiled list of supplied goods and services. 

Who is Responsible for Issuing a GST Invoice?

When an individual owns a business registered under GST, he/she is responsible for issuing a GST invoice with an accurate format. The supplier is required to provide the name of the buyer for every transaction that takes between the two parties, on the bill. A GST purchase invoice is received by the buyer for any services taken, by the trader registered under GST. 

When is a GST Invoice or Bill Issued by a Supplier?

It is common for people to assume that they must get a GST invoice right after they have received any goods at their location. However, that is not actually how a GST invoice works. It is quite baffling to create a GST invoice right after the things are sent out to the recipient. For this reason, there is a precise deadline defined by the government that must be followed by the supplier to improve the situation. 

For Goods

As a product supplier, an individual is required to prepare the GST bill by the stated date of transfer of goods or before that. Under Section 2 (96) of the CGST Act, 2017, the following is meant to be understood when we talk about the removal or transfer of goods:

  • The purpose of shipping is to ship the goods to the recipient or the buyer.
  • The merchant delivers the products to the buyer for pickup. Whoever the buyer has authorized to pick up the goods on his behalf.

For Goods (Continuous Supply)

When the bill has to be prepared for a consumer who regularly places an order with the same supplier, then the supplier is required to issue the bill on the day when money is received or before it. However, this is only valid in the case of a continuous supply of goods.

For Services

The provider is required to issue the GST invoice bill for the provided services within 30 business days of the date of service. 

For Bank and NBFC Services

When acquiring financial services from banks in addition to other financial organizations, the recipient can expect an invoice shall be issued to them within 45 days from the date of service. Banks and NBFCs are exempt from the requirement of issuing a GST invoice within 30 days from the date of supply of service, like other service providers.

Also Read: What Is The Process For Issuing A Tax Invoice?

Benefits of Maintaining Properly Formatted GST Purchase Bills

The properly maintained GST invoice format is crucial as it could offer the following benefits:

  • Efficient Compliance with Tax Regulations 
  • Enhanced Management of Cash Flow
  • Improved Reputation of the Business
  • Simplification of the Business and Assessments

Properly formatted GST invoice bill can enhance the transparency in the transactions that take place in an organization. This could prevent tax evasion and foster accountability as well. Moreover, these invoices act as a crucial record for the purpose of finances and audits which facilitates the task of record-keeping. Accurate GST invoices can streamline the process of tax compliance for the business while enhancing cash flow management and simplifying the audits. 

Conclusion

A GST invoice can be considered a vital document that can significantly increase the chances of a successful transaction between the seller and the buyer. The GST invoice acts more than just a piece of mere evidence, it can even add to the benefits of the Input Tax Credit. We have offered you the right GST invoice format sample which can help you stay out of the potential trouble later. Appropriate knowledge of GST billing guidelines and Indian GST billing requirements can help ensure that all GST objections are fulfilled and the deal can be finalized without any errors or delays.

author avatar
Aaryan Singh
B.Com degree with finance and accounting Specialisation in Goods and Service Tax (GST) and taxation system Completed certification course on GST from ICAI in 2022 Online GST practitioner course completed in 2023 from Indian Institute of Skill Development and Training.

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