Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
Invoice value equals taxable value plus GST for complete transaction clarity.
GST invoices must include mandatory details like GSTIN, tax rates, and item specifics.
Different GST invoice types address specific compliance requirements.
Goods require three invoice copies, while services need two for proper documentation.
Pre-registration invoices can be revised within one month of GST registration.
A GST invoice presents the tax amount, tax rate, subtotal and the total in addition to the line total. However, the invoice value and the taxable value on an invoice differ based on tax applicability. Learn what is invoice value in GST to distinguish it from the taxable value on an invoice.
What Is a GST Invoice?
A supplier of goods and services needs to mandatorily issue a GST invoice to their customers, including details of goods and services supplied. A GST-compliant invoice highlights the transaction details between the supplier and the buyer, making it a legal document for record-keeping and tax compliance.
An invoice contains the list of goods and services supplied followed by the amount payable and the due date. It additionally includes the supplier’s and customer’s details to make it a valid invoice.
What Is an Invoice Value in GST?
A GST invoice issued by a supplier contains the tax rate, taxable value and the total amount before and after applying taxes. Suppliers need to mention applicable GST such as CGST and SGST or IGST on the invoice based on the place of supply for the customer’s clarity.
The total value of an invoice inclusive of GST is the invoice value. It is the cumulative sum of the value before tax and the applicable GST amount. For instance, consider the total of all items listed in an invoice as ₹1,000. The applicable GST rate is 18% (9% CGST and 9% SGST). Thus, the invoice value amounts to ₹1,000 + (18% of ₹1,000) = ₹1,180
A GST-registered business or supplier needs to issue a GST-compliant invoice to his/her customer for the sale of goods or services or both. Moreover, you should ask for an invoice from your vendor to claim an input tax credit (ITC) and reduce your outward tax liability.
What Are the Mandatory Fields a GST Invoice Should Have?
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The following are the mandatory details that a GST invoice should have:
A unique invoice number
Invoice date
Customer name
Shipping and billing address details
Customer’s and Taxpayer’s GSTIN, if they are registered under GST
Place of supply
Time of Supply
HSN code for goods and SAC code for services supplied
Item details such as item description, quantity and unit of items supplied
Total value
GST rate (CGST and SGST or IGST), tax amount, taxable value and applicable discounts, if any
You need to mention if GST is payable under the Reverse Charge Mechanism
A digital or handwritten signature or the supplier
Notably, if the recipient is unregistered under the GST regime and the value of supply exceeds ₹50,000, you, as a supplier need to include the details mentioned below:
Name and address of the recipient
Delivery address
State code and state name
When Should You Issue GST Invoices?
The GST Act defines the time limit for issuing a GST tax invoice for suppliers as follows:
Goods (Normal Case): On or before the date of removal/delivery of goods
Goods (continuous Supply): On or before the date of issue of account statement/payment
Services (General Case): Within 30 days of rendering services to the customer
Services (Banks and NBFCs): Within 45 days of supplying services to the recipient
When a supplier cannot charge GST to the buyer, he/she has to issue a bill of supply which does not include any tax amount. The following are the scenarios for issuing a bill of supply:
If a registered person sells exempted goods or services
When the registered person opts for the composition scheme
Invoice-cum-bill of Supply
When a registered person supplies exempted and taxable goods or services to an unregistered person, the supplier needs to issue an invoice-cum-bill of supply.
Aggregate Invoice
When the buyer is unregistered under GST and the value of multiple invoices is less than ₹200, the seller has the choice to issue an aggregate invoice or bulk invoice for multiple invoices every day.
For instance, if you have to issue three invoices of ₹70, ₹100 and ₹120 respectively, amounting to ₹290, you can issue an aggregate invoice or a single invoice amounting to ₹290.
Reverse Charge Invoice
If the recipient of goods or a taxpayer is liable to pay tax under the Reverse Charge Basis, he/she has to issue a reverse charge invoice for the goods and services he/she receives. Further, he/she has to mention the Reverse Charge Mechanism (RCM) on the invoice. The recipient of goods or services additionally needs to issue a payment voucher while paying the supplier.
Debit and Credit Note
A seller has to issue a debit note when the amount payable by the buyer increases in the following circumstances:
A tax invoice includes a lower taxable value than the amount that the seller should charge.
The tax invoice includes a lower tax value than the amount that the supplier charged.
A seller needs to issue a credit note when the value of the invoice decreases as follows:
The tax invoice includes a higher taxable value than the amount chargeable.
A tax invoice mentions a higher tax value than the amount chargeable.
The buyer returns the goods to the seller.
Difference Between Invoice Value and Taxable Value
A tax invoice contains details like the total value of supplies of goods and services before tax, the tax amount, the value of supplies after tax and discounts, if any. The total value of supplies mentioned in the invoice, including GST is the invoice value.
On the other hand, the total value of supplies before applying taxes is the taxable value. Suppliers need to apply GST on the taxable value to derive the invoice value. Thus, invoice value is the summation of the taxable value and the GST amount.
Can You Revise an Invoice Issued Before GST?
GST regulations allow the revision of an invoice within a specific time limit. Dealers need to apply for provisional registration before they get the permanent registration certificate. The norm applies to all invoices that suppliers issue between the date of implementation of GST and the date of issuance of the GST registration certificate.
A dealer needs to issue a revised invoice against previously issued invoices within 1 month from the date of issue of the GST registration certificate.
Suppliers need to issue multiple copies of an invoice for various purposes like tax compliance, record keeping and audit. The following are the number of invoices that a supplier has to issue:
Number of Invoice Copies for Goods Supply
If a supplier supplies goods, he/she has to issue three copies of invoices as follows:
Original Invoice: The first copy needs to be issued to the recipient.
Duplicate Copy: A supplier has to issue a duplicate copy for the transporter to check the goods in transit.
Triplicate Copy: The triplicate copy remains with the supplier for record-keeping, bookkeeping and audit purposes.
Number of Invoice Copies for Service Supply
If a supplier supplies services, he/she needs to issue two copies of invoices as follows:
Original Invoice: The supplier has to issue the original copy to the customer.
Duplicate Copy: The duplicate copy needs to be retained with the supplier for future reference, tax compliance and as evidence of the sale of services.
Conclusion
Knowing what is invoice value in GST can help suppliers understand the difference between invoice value and taxable value on an invoice. This improves the accuracy of invoices and their details, making it a valid invoice. You can mention the invoice value and taxable value on the invoices you issue to your customers to enhance the brand image and reputation as a complete supply chain solution.
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FAQs
What is the difference between taxable value and invoice value in GST?
Taxable value refers to the total value of goods or services before taxes, while invoice value includes the taxable value plus the applicable GST. For instance, if the taxable value is ₹1,000 and GST is 18%, the invoice value will be ₹1,180.
What mandatory details should a GST-compliant invoice include?
A GST invoice must have a unique invoice number, GSTINs of the supplier and recipient, taxable value, tax rates, item details, place of supply, and applicable GST amounts (CGST, SGST, or IGST). It should also include the supplier's signature, either handwritten or digital.
Who needs to issue a GST invoice, and when?
All GST-registered businesses must issue a GST invoice for every taxable sale of goods or services. For goods, the invoice should be issued before delivery, and for services, within 30 days of service completion (45 days for banks and NBFCs).
Can a supplier revise an invoice issued before GST registration?
Yes, GST regulations allow suppliers to revise invoices issued before registration. This must be done within one month of obtaining the GST registration certificate, applicable to transactions between the GST rollout date and the registration date.
How many copies of a GST invoice should be issued, and why?
For goods, three copies are required: one for the buyer, one for the transporter, and one for the supplier's records. For services, only two copies are needed: one for the customer and the other for the supplier's records, ensuring compliance and documentation.
Shreyansh Singh, an IIT Kanpur alumnus, has eight years of experience in the finance industry. He has spent 5 years at American Express developing mid to long-term strategies for multiple markets including US, Europe and India. Shreyansh currently leads Growth and Strategy initiatives at Pice.
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