An Alumnus of IIM and DU with almost a decade of experience in the banking and finance sectors. I had the opportunity to work with all types of institutions in BFSI ecosystem like Bank, NBFC, Fintech, Consulting and Auditor. I started my professional journey at KPMG and subsequently worked in leading names of the BFSI sector including Ujjivan Bank, Vistaar Finance. Currently building a fintech startup ( PICE) by handling alliances, compliance and creation of GTM strategy for payments and credit product.
Under the regime of Goods and Services Tax (GST) in India, issuing invoices within a specific timeframe is an important compliance requirement for businesses. The law of GST specifies deadlines for tax invoice issuance to maintain accurate documentation for both businesses and consumers.
These time limits vary, depending on the type of supply and whether it is for the supply of goods or services.
In this blog, we will discuss the time limit for the issue of invoices under GST for goods and services, while highlighting the definition of a tax invoice, the details required in an invoice, and many more.
What Is a Tax Invoice?
A tax invoice is a primary document that outlines the details of a transaction. It consists of essential details of sold goods, like the applicable taxes, quantity, and taxable value. It serves as proof of the time of supply, which enables input tax credit claims for consumers. In India, a supplier must issue a tax invoice to a consumer on account of the sale of goods.
The GST Law defines a tax invoice as ‘a document issued by an input service distributor (ISD) which will also include any additional supplementary or revised invoice issued by a supplier, regarding a previous supply that was made.'
An original GST invoice must include:
It is an essential document which a supplier of services issues.
Any concept-revised invoice or supplementary invoice which a registered person issues for some previous supplies.
Who Should Raise Invoices?
Any supplier of taxable goods needs to issue an original GST invoice at the time of the sale of goods. The invoice should consist of the product description, value of the products, quantity, and tax liability.
GST receipt voucher needs to be issued during the receipt of advance payment for goods or services. In case a supplier of services does not deliver in return for the advance payment, it leads to the issuance of a refund voucher.
Following are the GST invoice rules which are required:
A supplier's name, GSTIN and address
Unique serial number which consists of only numerals and/or alphabets
Date of invoice issuance
Recipient's name, GSTIN and address
Description of the product and/or service
SAC of services or HSN Code of goods
Unique Quantity Code and quantity of goods
Valuation of goods and/or services
Applicable tax rate (CGST, SGST, IGST)
Value of discounts after deduction of discount, if any
State name and the place of supply for inter-state supplies
The total amount of tax payable
Place of delivery if it is not the same as place of supply
Applicability of reverse charge
Mention of ‘supplementary invoice’ or ‘revised invoice’ along with the original invoice’s invoice number and date
Supplier's applicable signature or digital signature
The invoice number, which needs to be a combination of numbers, alphabets and special characters.
Details Required for Tax Invoices for Exports
In the case of invoice for export supplies, the export invoices must include the following details:
Supplier’s Credentials: Name, address and contact details of the supplier for proper identification
Buyer’s Credentials: Name, address of delivery and contact details of the buyer
Details of the Goods or Services: Information on the services or goods, quantities of goods, total amount, applicable rate of tax
Supplier’s GSTIN: Unique identification number, which is allotted to every taxable person
Invoice Date: Date of export invoice generation
Invoice Number: Unique alpha number for recording and tracking transactions
Conversion Rate: Mention currency conversion when you are dealing with other currencies than the Indian rupee, especially in the case of export transactions
Total Amount: Total value of the business transaction which includes freight, insurance and various taxes
Export Type: The invoice should contain details of the type of export. For example, if the export was conducted after payment of taxes (IGST) or under a letter of undertaking to a SEZ.
Shipping Bill Details: You need to file a document with Customs, consisting of the value and type of goods you intend to export.
Additional Note: The invoice must also consist of any additional charges, information, or remarks for the importer from the supplier.
Time Limits for Issuance of Tax Invoices
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The prescribed time limits for issuing a tax invoice depend on the type of case– normal or continuous supply of services.
Normal Case: In case there is movement of goods, the issue of tax invoice must be from the location of the supplier to the buyer’s location, on or before goods removal. In case the taxable supply does not involve the movement of goods, the supplier needs to issue the invoice on or before the time of delivery of goods.
Continuous Supply of Goods/Services: For a continuous supply of goods/services where there are successive payment statements or accounts, you need to issue the invoice before or at the time of each payment.
Take a look at the table below to understand the time limits for issuance of tax under different circumstances:
Case 1: Supply of Goods
Description
GST Invoice Issuance
No movement of goods
You need to issue a GST invoice during the delivery of goods.
There is the movement of goods
You need to issue a GST invoice during or before the time of removal of goods.
When you issue goods on an approval basis or a sale
You need to issue GST at one of these two events, whichever is earlier: before the time of supply, at the time of supply or 6 months from the date of removal
When there is a continuous supply of goods
You need to issue a GST invoice during the time or before each receipt of payment or statements of accounts issuance.
Case 2: Supply of Services
Description
GST Invoice Issuance
For every kind of supply of services, excluding suppliers of insurance and banking services
You need to issue a GST invoice within 30 days from the supply of service date
Supply of insurance or banking services
You need to issue a GST invoice within 45 days from the supply of service date
When there is a continuous supply of services:
When the payment due date is known during the time of the service contract
On or before the supply of service due date
The payment due date is not known during the service contract time
Before or at the payment receipt time
Connection of the payment with an event completion
Adhering to the time limit for the issue of invoices under GST for goods and services is crucial for maintaining compliance and avoiding hefty penalties for issuing false invoices. Timely invoicing not only ensures smooth tax credits for recipients but also avoids financial risks for suppliers. Furthermore, it helps increase transparency in tax reporting.
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FAQs
What is a tax invoice under GST, and why is it important?
A tax invoice is a key document that details the specifics of a taxable supply, including information like the supplier, recipient, goods/services, and applicable taxes. It serves as proof of supply and is critical for claiming Input Tax Credit (ITC). Timely issuance ensures compliance with GST laws and avoids penalties.
What are the mandatory details required in a GST invoice?
A GST invoice must include the supplier's and recipient's names, GSTINs, addresses, invoice date, HSN/SAC codes, tax rates, discounts, and total tax amount. For export invoices, additional details like currency conversion, shipping bill details, and export type are required. These ensure accuracy in tax reporting and transparency.
What are the time limits for issuing GST invoices for goods?
For goods with movement, invoices must be issued at or before removal; for goods without movement, at delivery. In cases of continuous supply, invoices are issued before or with each payment or statement of account. For goods sent on approval, the invoice is due within six months or at supply, whichever is earlier.
How are GST invoices issued for the supply of services?
For services (excluding banking/insurance), invoices must be issued within 30 days from the supply date. Banking and insurance services have a 45-day limit. For continuous supply of services, the invoice timing depends on the payment due date, payment receipt, or event completion, as specified in the service contract.
What are the consequences of not issuing GST invoices on time?
Failure to issue GST invoices within the prescribed time can result in penalties, loss of Input Tax Credit (ITC) eligibility for buyers, and financial risks for suppliers. It also leads to non-compliance with GST laws, impacting business reputation and transparency in tax reporting.
An Alumnus of IIM and DU with almost a decade of experience in the banking and finance sectors. I had the opportunity to work with all types of institutions in BFSI ecosystem like Bank, NBFC, Fintech, Consulting and Auditor. I started my professional journey at KPMG and subsequently worked in leading names of the BFSI sector including Ujjivan Bank, Vistaar Finance. Currently building a fintech startup ( PICE) by handling alliances, compliance and creation of GTM strategy for payments and credit product.
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