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Some unknown and important facts relating to Tax Invoice under GST:

Most of your clients must be grappling with the problems around issuance of Tax Invoice. Most of the time they reflect lack of awareness as to time of issue of Invoice, when to revise the invoice, when to issue credit note, how to return rejected material and when to transport goods without invoice. This confusion leads them to adopt wrong procedures which creates difficulty for your clients. Here are some unknown and important facts of tax invoice under GST:

What is a Tax Invoice?

Tax Invoice is a document which supplier issues to the recipient which evidences that the goods/services have been supplied by him. Tax Invoice contain all the details including the GSTIN of recipient, Tax Invoice No, HSN/SAC Code, Quantity, Value of Supply, Tax, Address of recipient etc. It is a comprehensive document which becomes the basis for entire supply chain structure under GST. It lays the foundation of all the provisions of GST. Therefore, it becomes utmost important that Tax Invoices are raised with utmost caution. In case of prescribed tax payers, the issuance of Tax Invoice has been mandatorily made electronic which is famously known as e-invoice.

When to issue a Tax Invoice?

The experience at Unitax tells that at most of the taxpayers are unclear as to when tax invoice should be issued. Whether it has to be before supply of goods or it can be raised after few days etc. As per Section 31 of Central Goods and Services Tax Act 2017, A tax invoice shall be issued before the removal of goods by the taxpayers or where there is no transportation involved, when goods are delivered to the recipient. If the invoices are issued after this period, it shall have no validity.

In case of service industry, the tax invoice shall be issued within 30 days of rendering of service or if the supplier is a banking institution, it may do so within 45 days. In case of goods, the taxpayer is required to issue tax invoice in triplicate copy whereas in case of services, tax invoice is to be issued in duplicate copy.

What is bill of supply?

Bill of supply is similar to tax invoice as far as fields are concerned, but the only difference lies is that Bill of Supply shall be issued in cases where the registered person supplies exempted goods or is covered under composition scheme. In cases where the person is supplying taxable as well as exempted goods, he may issue Invoice-cum-Bill of Supply as per Rule 46A of Central Goods and Services Tax Rules 2017.

When can a tax invoice be revised?

Unitax usually receives queries from consultants as to what to do in case of rejection, material lost or some other adjustment. They often seek replies around the revising the tax invoice. The Tax Invoice under GST Law can only be revised in case of invoices issued between the period of date of grant of registration and effective date of registration. In no other case, can a tax invoice be revised. Where there is any change in value of supply, the same can be adjusted only through debit or credit notes by the supplier.

Who can issue credit/debit notes?

As a matter of practice, it is seen that both the supplier and recipients keep on issuing credit/debit notes for change in value of supply. Whereas GST law vide Section 34 of CGST Act 2017 permits only the supplier to issue credit and debit notes. The recipient of goods is not allowed to issue GST Debit or Credit notes, though he may issue commercial note which shall have no impact on GST liability or claim of Input Tax Credit (ITC). In cases where supplier does not agree to issue credit note for rejection of goods by recipient, the recipient shall have to first record the goods and then return them on issuance of tax invoice to nullify the transaction. Issuance of debit note by recipient for such transactions is illegal.

What is delivery Challan and when to use it?

A delivery challan is a document which is used for transportation of goods without tax invoice. It contains all the fields of the tax invoice, but the only difference is that delivery challan does not result into any tax liability. Delivery challan can be used only in specified circumstances of:

(a) supply of liquid gas where the quantity at the time of removal from the place of

business of the supplier is not known,

(b) transportation of goods for job work,

(c) transportation of goods for reasons other than by way of supply, or

(d) such other supplies as may be notified by the Board,

In no other circumstance, can delivery challan be used. In clause (c) delivery challan can be issued in cases other than supply such as sending goods for packaging, Sending goods/machinery for repair etc. The delivery challan must expressly mention that the goods are sent for specified purposes other than supply. The consultants may also note that e-way bill is a must in case of delivery challan as well. Where goods sent on challan are not accompanied by e-way bill, department may initiate penalty proceedings under Section 125/129 of CGST Act 2017. In case there is any such notice issued by the department, Unitax can help in preparation of Reply to GST Notice or get the appeal drafted from our experts. And to reiterate Unitax works only for professionals, Your client remains with you always. 

The issuance of documents for supply is highly crucial and we at Unitax are ready to help and solve your queries. Our packages help consultants get all their queries resolved with ease which helps their client adopt best practices and save themselves from heavy penalty. If you have a query or facing any issue, please do contact Unitax at +91-708-790-3328 or email us at support@unitax.in

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Welcome to Unitax

Integrated GST Solutions for Chartered Accountants, Lawyers and Bookkeepers.

Please Enter Details For Free Trial