Tax Invoice

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What is a Tax Invoice?

A Tax Invoice is a list of goods or services that must be issued for every taxable supply, containing the item or service descriptions, quantities, date of shipment, mode of transport, prices and discounts, if any. It also includes the total value and the tax charged on the supply. 

Why is a Tax Invoice required?

A Tax Invoice is required to provide confirmation or evidence that a supply of goods or services took place. It is also necessary so that the recipient is eligible to claim ITC.

When is a tax invoice issued?

A Tax Invoice is issued by a registered dealer before or during the supply of taxable goods or services. It is mandatory for claiming input tax credit.

Number of tax invoice copies to be issued

For the supply of goods, the following copies are required:

For the supply of services, the following copies are required:

Time limit for issuing tax invoices

Supply of goods

If the supply involves the transfer of finished goods from one place to another, then the invoice must be issued at or before the time of transfer. So if a dealer is purchasing pens from a supplier, the supplier needs to issue an invoice at or before the time the pens leave the warehouse. If the supply does not involve the transfer of finished goods, the supplier can issue the invoice when the goods are delivered to the recipient. If a dealer is purchasing a custom partition wall for his/her office that will be completely assembled on-site, the invoice must be issued at the time the completed wall is made available at the recipient’s office. 

Supply of services

In most cases, the tax invoice must be issued within 30 days from the date of supply. If the supplier is a bank or an insurer, then the invoice must be issued within 45 days from the date of supply.

Format of tax invoice

Based on the rules prescribed by the Government, here is what a sample tax invoice will look like in the GST regime:

Tax Invoice

Revising an already-issued tax invoice

Once an invoice is issued, it cannot be modified. If there are changes to be made in the taxable value or amount of the product, one of the following is to be issued:

The format of these documents is exactly the same as that of a tax invoice. The only difference is that it needs to be explicitly specified at the top whether the document is an invoice, a debit note, or a credit note.

Revised Invoice 

Invoices that are issued after the date GST came into effect, but before the date that the certificate of registration was issued, require a revised invoice. This is to be issued within one month after the date of the certificate of registration.

Contents of tax invoices for special cases

When the supplier is an office under a banking company, or a financial company:

When the supplier is an insurer, banking company, financial institution or non-banking financial company, or passenger transporter:

The tax invoice must contain all information mentioned in a general tax invoice, and

When the supplier is a Goods Transporter Agency (GTA):

The invoice must contain all of the contents of a general tax invoice as well as the following details:

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