Sec 31 – Tax Invoice

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Sec 31 – Tax Invoice 2017-04-14T14:11:38+00:00
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  • Ashish BadalaCA Ashish Badala
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    (1) A registered person supplying taxable goods shall, before or at the time of,-
    (a) removal of goods for supply to the recipient, where the supply involves movement of goods; or
    (b) delivery of goods or making available thereof to the recipient, in any other case,issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed.
    Provided that the Government may, on the recommendations of the Council, by notification, specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed.
    (2) A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed:
    Provided that the Government may, on the recommendations of the Council, by notification and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which-
    (a) any other document issued in relation to the supply shall be deemed to be a tax invoice; or
    (b) tax invoice may not be issued.
    (3) Notwithstanding anything contained in sub-sections (1) and (2)–
    (a) a registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him;
    (b) a registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
    (c) a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed:
    Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
    (d) a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment;
    (e) where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment;
    (f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
    (g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
    (4) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.
    (5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of services,–
    (a) where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment;
    (b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;
    (c) where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.
    (6) In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply made before such cessation.
    (7) Notwithstanding anything contained in sub-section (1), where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the time of supply or six months from the date of removal, whichever is earlier.
    Explanation.–For the purposes of this section, the expression “tax invoice” shall include any revised invoice issued by the supplier in respect of a supply made earlier.

    Priya MadrechaPriya Madrecha
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    31.1    Introduction
    Invoice is a document which records the terms of an underlying arrangement between parties. An invoice does not bring into existence an agreement but merely records the terms of a preexisting agreement. GST requires that an invoice – tax invoice or bill of supply – to be issued on the occurrence of certain event or within a prescribed time. Therefore, an invoice, among others is required to be issued for every other form of supply such as sale, transfer, barter, exchange, license, rental, lease or disposal. The section uses the phrase registered person as a person who is required to issue an invoice whereas a taxable person is one who alone is entitled to input tax credit.
    31.2    Analysis
    A.    Supplier of taxable goods is required to issue a tax invoice:
    — Before or at the time of removal of the goods where the supply involves movement of goods; or
    — Before or at the time of delivery of the goods to the recipient where the supply does not involve movement of goods.
    So, in order to determine when the tax invoice is to be issued, the supply must be classified into one of these two cases, that is, whether it is case of supply that involves movement or one that does not involve movement of the goods. Please refer to chapter regarding time of supply for detailed discussion about removal and movement of goods, mode & time of delivery of goods and the role of supplier or recipient in determining these questions.
    B.    Supplier of services is required to issue a tax invoice:
    —     Before provision of the services or
    —     After provision of the services but within a specified time.
    C.    In terms of the relevant Rule 1, a tax invoice referred to in this section shall be issued by the registered person containing the following: –
    (a)    name, address and GSTIN of the supplier;
    (b)    a consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as “-” and
    “/” respectively, and any combination thereof, unique for a financial year;
    (c)    date of its issue;
    (d)    name, address and GSTIN or UIN, if registered, of the recipient;
    (e)    name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered and where the value of taxable supply is fifty thousand rupees or more;
    (f)    HSN code of goods or Accounting Code of services;
    (g)    description of goods or services;
    (h)    quantity in case of goods and unit or Unique Quantity Code thereof;
    (i)    total value of supply of goods or services or both;
    (j)    taxable value of supply of goods or services or both considering discount or abatement, if any;
    (k)    rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
    (l)    amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
    (m)    place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce;
    (n)    address of delivery where the same is different from the place of supply;
    (o)    whether the tax is payable on reverse charge basis; and
    (p)    signature or digital signature of the supplier or his authorized representative:
    In respect of the particulars relating to HSN code cited in point (f) supra on the recommendations of the Council the Commissioner may, by notification for a specified period and class of registered persons who will be required to specify the number of digits of HSN code for goods or the Accounting Codes for services; The Commissioner is also empowered to specify by way of notification (on the recommendations of the Council the class of registered persons that would not be required to mention the HSN code for goods or the Accounting Codes for services, for such period as may be specified in the said notification:
    D.    Tax Invoices in cases of special services
    Sl.
    No.     Class of supplier of taxable services     Nature of document     Optional     Mandatory
    1     Insurer,
    Banking
    Company,
    Financial
    Institution and
    NBFC     Tax Invoice or any other
    similar document      a.    Serial no.
    b.    Address of the recipient of services     All other particulars cited in clause C supra
    2     Goods
    transport agency transporting goods by road      Tax Invoice or any other
    similar
    document     None      a.    All other particulars cited in clause C supra
    b.    Gross     weight     of consignment
    c.    Consignor     and
    Consignee name
    d.    Regn. No. of Vehicle
    e.    Details     of     goods transported
    f.    Origin and destination details
    g.    GSTIN of person liable to pay tax whether as consignor / consignee or as GTA
    3     Passenger transport agency     Tax invoice or ticket     a.
    b.     Serial no.
    Address of the recipient of services     All other particulars cited in clause C supra
    E.    In case of exports of goods or services, the invoice shall carry an endorsement
    “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”, as the case may be, and shall, in lieu of the details specified in clause (c) cited supra, contain the following details:
    (i)    name and address of the recipient;
    (ii)    address of delivery;
    (iii)    name of the country of destination; and
    (iv)    number and date of application for removal of goods for export:
    F.    Supplies not exceeding Rs.200/-
    A registered person is not required to issue a tax invoice in accordance with the provisions of clause (b) of sub-section (3) of section 31 i.e. in respect of supply of goods or services or both where the value therein does not exceed a sum of Rs.200/- subject to the following conditions, namely: –
    (a)    the recipient is not a registered person; and
    (b)    the recipient does not require such invoice,
    However, in respect of such supplies the supplier shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.
    G.    Commissioner’s powers
    The Commissioner, on the recommendations of the Council, is empowered to specify the class of persons rendering services who can issue any other document which could be construed to be a tax invoice or circumstances when a tax invoice need not be issued.
    H.    Revised Tax Invoice
    Within one month from the date of registration, the taxable person may issue a revised tax invoice for supplies from the effective date of registration till the date of issuance of registration certificate. Such person may also issue a consolidated revised tax invoice in respect of all taxable supplies made to a recipient who is not registered.
    In a transaction of inter-state supply where the value of supply does not exceed Rs.2.50 lakhs a consolidated revised tax invoice is to be issued separately for each of the recipients in a particular State who are not registered.
    I.    A registered person who has opted for composition of tax under section 10 of the Act or one who is supplying exempted goods or services or both is required to issue a bill of supply and not a tax invoice.
    J.    Bill of supply
    A bill of supply referred to in clause (c) of sub-section (3) of section 31 shall be issued by the supplier containing the following details: – (a) name, address and GSTIN of the supplier;
    (b)    a consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters -hyphen or dash and slash symbolised as “-” and
    “/” respectively, and any combination thereof, unique for a financial year;
    (c)    date of its issue;
    (d)    name, address and GSTIN or UIN, if registered, of the recipient;
    (e)    HSN Code of goods or Accounting Code for services;
    (f)    description of goods or services or both;
    (g)    value of supply of goods or services or both taking into account discount or abatement, if any; and
    (h)    signature or digital signature of the supplier or his authorized representative:
    K.    Supplies not exceeding Rs.200/-
    A registered person is not required to issue a bill of supply in accordance with the provisions of clause (c) of sub-section (3) of section 31 i.e. in respect of supply of goods or services or both where the value therein does not exceed a sum of Rs.200/- subject to the following conditions, namely:-
    (a)    the recipient is not a registered person; and
    (b)    the recipient does not require such invoice,
    However, in respect of such supplies the supplier shall issue a consolidated bill of supply for such supplies at the close of each day in respect of all such supplies.
    L.    Receipt Voucher
    Receipt of advance will require that a ‘receipt voucher’ be issued and not an invoice (of either kind). A receipt voucher referred to in clause (d) of sub-section (3) of section 31 shall contain the following :
    (a)    name, address and GSTIN of the supplier;
    (b)    a consecutive serial number containing alphabets or numerals or special characters -hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year
    (c)    date of its issue;
    (d)    name, address and GSTIN or UIN, if registered, of the recipient;
    (e)    description of goods or services;
    (f)    amount of advance taken;
    (g)    rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
    (h)    amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
    (i)    place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce;
    2(32) “continuous supply of goods” means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may subject to such conditions, as it may, by notification, specify;
    2(33) “continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify;
    (j)    whether the tax is payable on reverse charge basis; and
    (k)    signature or digital signature of the supplier or his authorized representative.
    Whenever a transaction envisages issue of Receipt Voucher, but thereafter does not translate into a transaction of supply will require issue of a refund voucher containing similar particulars cited supra.
    M.    Tax payable on reverse charge and supplies received from unregistered persons
    Where tax is payable on reverse charge basis or on receipt of supplies from unregistered persons – the recipient is required to prepare an invoice – tax invoice or bill of supply – to record and confirm facts relating to supplies received from such persons. Such transactions would also require a payment voucher to be issued (on similar basis as a receipt voucher) at the time of making payment.
    N.    Tax Invoice for an Input Service Distributor (ISD)
    An ISD Invoice or debit or credit note issued by an Input Service Distributor shall contain the following particulars in terms of Rule 7.
    (a)    name, address and GSTIN of the Input Service Distributor;
    (b)    a consecutive serial number containing alphabets or numerals or special characters’ hyphen or dash and slash symbolised as, “-”, “/”, respectively, and any combination thereof, unique for a financial year;
    (c)    date of its issue;
    (d)    name, address and GSTIN of the recipient to whom the credit is distributed;
    (e)    amount of the credit distributed; and
    (f)    signature or digital signature of the Input Service Distributor or his authorized representative:
    If the Input Service Distributor is an office of a banking company or a financial institution, including a non-banking financial company, a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the information as prescribed above.
    O.    Continuous supply of goods
    Continuous supply of goods, the invoice – tax invoice or bill of supply – is required to be issued:
    —     when the statement or a running-claim is issued; or
    —     when payment is received, whichever is earlier
    P.    Continuous supply of services
    For continuous supply of services, a tax invoice is required to be issued:
    —     when payment date is ascertainable as per the contract on or before the due date for payment; or
    — when payment date is not ascertainable from the contract on or before the time when the supplier of services receives the payment; or
    — when payment is linked to completion of an event on or before the date of completion of the event.
    Q.    Cessation of services
    On cessation of a contract for supply of services, the invoice is required to be issued to the extent supply is complete prior to cessation.
    R.    Goods sent on approval
    Invoice in respect of goods sent ‘on approval’ is required to be issued at the earlier of the end of 6 months from their removal or approval to accept supply is indicated to supplier.
    31.3 Comparative review
    Under the current indirect tax laws, depending upon the taxable event, as to whether it is manufacture or sale or service, excise invoices or tax invoices are raised.
    In the present scenario, under service tax regime, a time limit to issue a tax invoice is prescribed having regard to date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier. The GST law provides for such time limit to be prescribed.
    The provision to issue revised invoice (from the effective date of registration to the date of issuance of certificate) is not available at present. This document would be useful for claiming tax credit for supply of goods/services during this period.
    At present, invoices or bills of sale etc. can be issued inclusive of tax in certain cases whereas it is mandatory to indicate the amount of tax charged on every transaction in the GST regime
    31.4  FAQs
    Q1.     Is tax invoice required for advance payments received for goods or services?
    Ans. No, tax invoice is not required to be raised for advance payments received for goods or services. The recipient of payment would be required to issue a receipt voucher for receipt of payment.
    Q2.     Is it mandatory to mention the details of tax amount charged in the invoice?
    Ans. Yes, the tax invoice should mandatorily mention the details of tax amount change in the invoice.
    Q3.     Is it possible to take input tax credit based on the ‘bill of supply’?
    Ans. No, it is not possible to take input tax credit based on bill of supply.
    Q4.     Can a revised invoice be issued for taxable supplies?
    Ans. Yes, the registered taxable person can issue revised invoice. Every registered person who has been granted registration with effect from a date earlier than the date of issuance of certificate of registration to him, may issue revised tax invoices in respect of taxable supplies effected during the period starting from the effective date of registration till the date of issuance of certificate of registration.
    Provided that the registered person may issue a consolidated revised tax invoice in respect of all taxable supplies made to a recipient who is not registered under the Act during such period

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