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GST Invoice Explained | Simple Guide to understand GST invoice as per GST bill

What is a GST Invoice?

As per dictionary, an invoice is a list of goods sent or services provided, with a statement of the sum due for these. For a GST registered firm, creating a GST invoice or an invoice compliant with GST is a must.

You can create it easily with our Free GST Invoice Software.

Why is a Tax Invoice important for GST implementation?

To understand the importance of a tax invoice under GST regime, you need to understand the mechanism of GST in India.

GST works on the basis of input credit system. In simple words, if you’ve paid a certain amount of GST on a purchase, you can claim the credit on the sale of the final product.

Let us understand input tax credit under GST bill with this simple example.

You’re a manufacturer who has paid tax worth INR 50 on the purchase of raw material. Your tax liability on the sale of final good amounts to INR 100. You can avail input tax credit of INR 50 and reduce your tax liability with the tax you have already paid.

Hence, to keep a track of every transaction with respect to the firm, it is important to create a GST Invoice. To summarize, a GST tax invoice helps you in the following manner –

  • A GST invoice reduces ambiguity.
  • A GST invoice helps in availing input tax credit.
  • A GST invoice becomes your advocate in proceedings and assessment.
  • A GST invoice helps the exact time of transaction.
  • A GST invoice helps in confirming in determining constant flow of goods and services.

What information is mandatory for a complete GST invoice?

A GST Tax invoice will have everything required in a regular invoice along with few crucial details pertaining to GST bill implementation. They’re as follows –

  • Invoice number and date
  • Name of the Customer
  • Address – Both Billing & Shipping
  • GSTIN of both Customer & Supplier *
  • Place of Supply
  • SAC/HSN Code
  • Details – Item description, Quantity, Unit, Total Amount
  • Taxable Value & Discounts, if any
  • Amount of Tax and Tax rate – CGST, SGST, IGST
  • Signature of the Supplier
  • Whether Reverse Charge basis applies or not

*There may be cases where the recipient is not registered but your transaction value exceeds INR 50,000. In such cases, the invoice will include –

  • Name & Address of the Recipient
  • Delivery Address
  • State Name & Code

When should I issue a GST invoice?

GST bill has separate rulings for different cases. These cases has been summarized for you below -

GOODS (GENERAL CASE) GOODS (CONTINUOUS SUPPLY) SERVICE (GENERAL CASE) SERVICES (BANKS & NBFC)
On/Before Date Removal/Delivery On or Before date of Issue of Account Statement / Payment Within 30 days of Supply of Services. Within 45 days of Supply of Service.

How many copies of GST invoice shall I issue?

The number of GST invoice being issued are –

Goods :For the supply of good, three copies of GST invoice are required which are as follows-

  1. Original for the recipient
  2. Duplicate for transporter
  3. Triplicate for Supplier

Services - For the supply of service, two copies of GST invoice are required which are as follows

  1. Original for Recipient
  2. Duplicate for Supplier
What are some of the special type of GST invoice?
  1. Bill of Supply – When a person registered under GST bill is supplying exempted goods/service or has opted for composition scheme, a bill of supply is issued which is similar to a regular GST invoice but has no tax amount.
  2. Invoice – cum-bill-of-supply – When a registered supplier under GST bill is transacting with an unregistered recipient and dealing in both exempted and non-exempted goods and services, a joint invoice-cum-bill-of-supply can be issued.
  3. Aggregate Invoice – If a registered seller under GST bill is dealing with an unregistered person and there are multiple invoices where the value of a single invoice is less than INR 200, then the registered supplier can issue a bulk or aggregate invoice on a daily basis.
  4. Debit Note – This is issued by the supplier when the amount to be paid under GST bill by the buyer increases due to following reasons

    - The taxable value charged as per GST bill is lesser than the correct value that should have been charged.

    - The tax value as per GST bill is lesser than the correct value that should have been charged.

  5. Credit Note –This is issued by the supplier when the amount to be paid under GST bill by the buyer decreases due to following reasons –

    - The taxable value charged as per GST bill is more than the correct value that should have been charged

    - The tax value as per GST bill is more than the correct value that should have been charged.

    - In case of return of goods

    - In case of defective items

Creating a complete GST invoice is not as difficult as it seem like especially with a free GST Invoice Maker software like this. Kick off your journey with GST right away.