GST Tip – 246

As per the Final Returns Formats, supplies to B2C have to be shown in Table 7 of GSTR – 1, grouped by Tax Rates only for Intrastate and Interstate supplies. In the case of interstate supplies, it has to be grouped by State Code and then by Tax Rates.  HSN Code /SAC Code along with Tax paid on provisional assessment from the old formats given in Table 7.

GST Tip – 245

As per Final GST Returns, in Table 6 of GSTR – 1, data for exports / deemed exports and supplies to SEZ should be shown in this table. The columns related to CGST & SGST rates and amount, tax paid on the provisional basis, HSN Code and identification of line as the supply of goods or services have been dropped. Grouping of the data is to be done on the basis of exports / deemed exports or SEZ supplies in the new returns unlike the previous formats of exports with payment of GST and without payment of GST.

Demystifying the Revised Invoice Rules

Demystifying the Revised Invoice Rules

GST Rules released in the month of September 2016 have been revised basis of the feedback received from various stake holders for the rules specifically and also the changes made in the GST Laws. The 14th GST Council meeting held on 31st March have approved the GST Rules in principle and released the same.

The Revised GST Rules for Tax Invoice has undergone some changes with the respect to shipment of goods / supply of goods without the issue of the invoice, issue of a delivery challan etc. Other areas have not seen much changes.

Rule 1 – Tax Invoice

A tax invoice has to be issued by the supplier of goods or services based on section 31 of the CGST Law, “(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,”

The major changes announced in the revised rules is, the tax invoice numbering can be in multiple series and also special characters are allowed. Since it is a computerized environment and matching is being done by the system it is recommended to avoid these special characters. The following information has to be shown on the tax invoice.

  1. name, address and GSTIN of the supplier;
  2. a consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year;
  3. date of its issue;
  4. name, address and GSTIN or UIN, if registered, of the recipient;
  5. 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;
  6. HSN code of goods or Accounting Code of services;
  7. description of goods or services;
  8. quantity in case of goods and unit or Unique Quantity Code thereof;
  9. total value of supply of goods or services or both;
  10. taxable value of supply of goods or services or both taking into account discount or abatement, if any;
  11. rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
  12. amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
  13. place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce;
  14. address of delivery where the same is different from the place of supply;
  15. whether the tax is payable on reverse charge basis; and
  16. signature or digital signature of the supplier or his authorized representative

 

Exports under GST can be done by payment of IGST or through Bond and in such cases, the same should be printed on the tax invoice accordingly.

  1. SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST”
  2. SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST

The export invoice under GST should contain the following information

  1. name and address of the recipient;
  2. address of delivery;
  • name of the country of destination; and
  1. number and date of application for removal of goods for export:

As per Sub-section 2, section 31 of the CGST Act the tax invoice need not be issued in the following cases

(a) the recipient is not a registered person; and

(b) the recipient does not require such invoice,

Rule 2– Time limit for issuing tax invoice

The tax invoice referred in Rule 1 has to be issued within 30 days of the completion of service in case of supply of services under GST.

There is an exception for the said rule in the case of supply of services by a bank or an insurance company or financial institution or non-banking financial company, the same can be issued within 45 days and the document can be tax invoice or any other document in lieu of tax invoice.

The tax invoice has to be issued within the completion of the quarter during which the supply has been made to related parties as given in section 25 of the CGST Act.

 

Rule 3– Manner of issuing of tax invoice

Similar to the Central Excise provisions, the tax invoice under GST in case of supply of goods has to be issued in triplicate

(a) the original copy being marked as ORIGINAL FOR RECIPIENT;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and

(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

In case of supply of the goods, the same has to be issued in duplicate

(a) the original copy being marked as ORIGINAL FOR RECIPIENT; and

(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

The serial number of the tax invoice issues during the period i.e month has to be reported in the monthly return of outward supplies i.e GSTR – 1.

Rule 4– Bill of Supply

A bill of supply is to be issued by a registered taxable person in case of supply of exempted goods or services or registered under composition scheme as per the provisions of clause (c ) of sub-section 3 of section 31 of CGST Act.

The bill of supply should contain the following information

  1. name, address and GSTIN of the supplier;
  2. 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;
  3. date of its issue;
  4. name, address and GSTIN or UIN, if registered, of the recipient;
  5. HSN Code of goods or Accounting Code for services;
  6. description of goods or services or both;
  7. value of supply of goods or services or both taking into account discount or abatement, if any; and
  8. signature or digital signature of the supplier or his authorized representative:

 

Rule 5– Receipt Voucher

A receipt voucher has to be issued as per the provision of clause d, sub-section 3 section 31 of the CGST Act in cases where the registered taxable person receives an advance payment from his customers.

A receipt voucher should contain the following information

  1. name, address and GSTIN of the supplier;
  2. 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
  3. date of its issue;
  4. name, address and GSTIN or UIN, if registered, of the recipient;
  5. description of goods or services;
  6. amount of advance taken;
  7. rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
  8. amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
  9. 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;
  10. whether the tax is payable on reverse charge basis; and
  11. signature or digital signature of the supplier or his authorized representative.

 

Though it is called as receipt voucher it contains all the information of the Tax Invoice and the number of receipt vouchers issued during the month is not required to be reported in GSTR – 1.

Rule 6 – Supplementary Tax Invoice or Debit Note or Credit Note

A debit note or credit note can be issued by the supplier of goods or service for the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient.

A revised tax invoice can also be issued by the supplier of goods or services.

A supplementary invoice or a debit note or a credit note should contain the following information

 

  1. the word “Revised Invoice”, wherever applicable, indicated prominently;
  2. name, address and GSTIN of the supplier;
  3. nature of the document;
  4. 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;
  5. date of issue of the document;
  6. name, address and GSTIN or UIN, if registered, of the recipient;
  7. 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;
  8. serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
  9. value of taxable supply of goods or services, rate of tax and the amount of the tax credited or, as the case may be, debited to the recipient; and
  10. signature or digital signature of the supplier or his authorized representative:

 

A revised tax invoice can be issued by a taxable person for the supply of goods and services made by him prior the date of issue of the registration certificate, if the date of the registration certificate is prior to the date of issue of the registration certificate.

A 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.

In the case of inter-State supplies, where the value of a supply does not exceed two lakh and fifty thousand rupees, a consolidated revised invoice may be issued separately in respect of all recipients located in a State, who are not registered under the Act.

In the normal course, the input tax credit is allowed on a tax invoice or a revised tax invoice or on a debit note or credit note. There are certain cases where the input tax credit is not allowed and in such cases, the tax invoice should be marked clearly “Input Tax Credit Not Allowed” on the tax invoice. The cases under which the input tax credit is not allowed is

 

  • Section 74 deals with Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts.
  • Section 129 deals with Detention, seizure and release of goods and conveyances in transit.
  • Section 130 deals with Confiscation of goods or conveyances and levy of penalty.

Rule 7 – Issue of Tax Invoice in special cases

An Input Service Distributor may issue a tax invoice or credit note for transfer of input tax credit and in such a cases the tax invoice or credit note issued should contain the following information

  1. name, address and GSTIN of the Input Service Distributor;
  2. 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;
  3. date of its issue;
  4. name, address and GSTIN of the recipient to whom the credit is distributed;
  5. amount of the credit distributed; and
  6. signature or digital signature of the Input Service Distributor or his authorized representative:

Name and address of the recipient may be contained on the tax invoice or not in the case of tax invoices issued by a banking or a financial company or non-banking financial company or an insurance company but it should have all other information and may be serially numbered or not.

In case if the tax invoice is being issued by a taxable person who is supplying services of transportation of the goods, in such cases additional information is required to be shown on the tax invoice apart from the information to be shown regularly like gross weight of the consignment, name of the consignor and the consignee, registration number of goods carriage in which the goods are transported, details of goods transported, details of place of origin and destination, GSTIN of the person liable for paying tax whether as consignor, consignee or goods transport agency.

There is also an exception available in case of services provided by a taxable person if it is related to transportation of passengers. A tax invoice shall include ticket in any form, by whatever name called, whether or not serially numbered, and whether or not containing the address of the recipient of service but containing other information.

Rule 8 – Transpiration of goods without issue of an invoice  

There are certain cases under which a tax invoice need not be issued during the movement of goods but the same should be issued subsequently or any other document can be issued in cases where the movement of goods does not amount to supply of goods or services. In such a cases a delivery challan has to accompany the goods.

The case under which it is not required are

  1. supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,
  2. transportation of goods for job work,
  3. transportation of goods for reasons other than by way of supply, or
  4. such other supplies as may be notified by the Board,

In the first case, it refers to the petro chemical industry where the quantity being supplied is not known and this is part of the continuous supply of goods.

In case of transportation of goods for job work, is not a supply but for further processing and the challan under which it was being sent was known as 57 (f) 4 and now the same can be renamed as Job work challan and it is recommended to maintain a separate series for each location from where the goods are sent out for job work.

There will be certain cases where the machinery is to be sent out for repairs like winding or calibration and such cases does not amount to supply of goods and tax invoice is not required to be issued, for such cases also it is recommend to maintain a separate series of challan numbering for each location.

And a provision is also made for future where the government can notify other transactions in the business where the tax invoice is not required to be issued during the movement of goods.

The following information must be present on the delivery challan, which needs to be accompanied during the movement of the goods

  1. date and number of the delivery challan,
  2. name, address and GSTIN of the consigner, if registered,
  3. name, address and GSTIN or UIN of the consignee, if registered,
  4. HSN code and description of goods,
  5. quantity (provisional, where the exact quantity being supplied is not known),
  6. taxable value,
  7. tax rate and tax amount – central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee,
  8. place of supply, in case of inter-State movement, and

Similar to the issue of tax invoice in triplicate, the delivery challan should also be issued in triplicate

(a) the original copy being marked as ORIGINAL FOR CONSIGNEE;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and

(c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.

Whenever tax invoice cannot be issued during the movement of goods, it should sent with a delivery challan and subsequently the tax invoice has to be issued in cases if the movement of goods involves supply.

The delivery challan issued in lieu of tax invoice shall be updated in the way bill i.e means forms are again going to be integral part of the taxation under GST.

The revised rules do not give any information in case of transfer of goods from one branch to another branch in the same state.

There is a specific provision in case of movement / shipment of goods in semi-knocked down or completely knocked down condition.  The provisions are

  1. the supplier shall issue the complete invoice before dispatch of the first consignment;
  2. the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;
  3. each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice; and
  4. the original copy of the invoice shall be sent along with the last consignment.

This provision is a welcome move but the only pre condition in such cases is that the shipment should happen within one year else the buyer cannot avail the input tax credit on the same. This may be useful in the erection or turnkey contracts but needs to be evaluated on case by case and then implemented else the input credit cannot be availed by the buyer.

Thought he revised Invoice rules tries to address most of the things missed in the first release, still we do not find any information on the transfer of spares from the principal to agent or from principal or agent to the end consumer in case of annual maintenance contracts. Normally in annual maintenance contracts or under warranty the price for the spares is already paid as part of the invoice and taxed accordingly but when the transfer happens is it required to pay tax again, does this not amount to double taxation? We need to have more information or clarity in these areas.

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