GST Invoice Format & Rules Explained: Your Guide to Seamless Compliance

• GST Invoice
• GST Invoice Format
• Time Limit of issuing the GST Invoice
• Copies of the GST Invoice required
• GST Invoice Rules

With GST around the corner, it is extremely critical for businesses to start invoicing under GST mode, and not face any roadblocks, as they usher in the new age. Businesses will need to ensure that the GST transaction invoices are passed with the requisite details, which will later enable them to claim the right ITC and remain GST compliant while growing continuously.

GST invoice

When a registered taxable person supplies taxable goods or services, a GST invoice is issued. To issue and receive a GST compliant invoice is a prerequisite to claim ITC. If a taxpayer does not issue such an invoice to his customer - who is a registered taxable person, his customer loses the ITC claim and the taxpayer loses its customers.

Key Components of a GST Invoice

A GST invoice must include several mandatory fields:

• Invoice number and date
• Customer name
• Shipping and billing address
• Customer and taxpayer's GSTIN
• Place of supply
• HSN code
• Taxable value and discounts
• Rate and amount of taxes i.e. CGST + SGST/UTGST (intra-state) OR IGST (inter-state)
• Item details i.e. description, unit price, quantity

Optional fields may include discounts, payment terms, and additional notes.

e-Invoice generated in TallyPrime

GST Invoice Formats and Types

Different formats exist for various transactions:

a.GST Invoice Format for Goods

This format is used when selling goods under GST regulations. It includes details about the seller, buyer, goods supplied and applicable taxes.

Key Elements:

• Supplier’s and buyer’s name, address, and GSTIN.
• Unique invoice number and date.
• Description of goods, HSN code, quantity, and unit price.
• Total taxable value and tax breakup (CGST, SGST, IGST).
• Place of supply (for inter-state sales).

b.GST Invoice Format for Services:

This format is tailored for businesses offering services, focusing on service-related details instead of goods.

Key Elements:

• Supplier’s and recipient’s name, address, and GSTIN.
• Unique invoice number and date.
• Description of services, SAC code, and service value.
• Applicable GST rates and breakup (CGST, SGST, IGST).
• Terms of payment (e.g., advance payment or full payment).

Special Formats:

Export GST Invoice Format

Used for exporting goods or services. It must mention “Export Without Payment of Tax” or “Export With Payment of Tax,” depending on whether IGST is charged.

Key Elements:

• Supplier’s and recipient’s details, including country of export.
• HSN/SAC code and taxable value.
• Mention of shipping bill details or bill of export.
• Tax breakup (if applicable).

Reverse Charge Invoice Format

Applicable when the recipient is liable to pay GST under the reverse charge mechanism.

Key Elements:

• Standard invoice details with a clear mention of “Reverse Charge”.
• Taxable value of the goods or services.
• Place of supply and GST rates.

ISD (Input Service Distributor) Invoice Format

Used by ISDs to distribute input tax credits (ITC) across multiple branches or units.

• Key Elements:
• ISD’s and recipient unit’s GSTIN.
• Details of eligible and ineligible ITC.
• Invoice number, date, and taxable amount.

Time limit of issuing the GST invoice

When Should a GST Invoice Be Issued?

A GST invoice must be issued at the time of supply of goods or services. For goods, it should be provided before or at the time of delivery. For services, it can be issued within 30 days from the date of service. Delayed or incorrect invoicing can lead to penalties and complications in claiming ITC.

GST Invoice Rules for Small Businesses and Startups

Small businesses and MSMEs benefit from simplified invoicing rules under certain turnover limits. Understanding these thresholds can help startups navigate compliance more easily.

Turnover Limits and Implications

Common Mistakes to Avoid in GST Invoicing

Quick Tips for Reducing Errors:

1. Automate Invoicing: Use GST-compliant software to minimize manual errors.
2. Stay Updated: Regularly review GST rules and updates from the GST council.
3. Training: Train staff responsible for invoicing to understand GST requirements.
4. Audit Regularly: Periodically audit invoices to identify and correct discrepancies.

Electronic GST Invoicing (e-Invoicing)

The e-invoicing system allows businesses to generate invoices electronically, which are then validated by the GST Network (GSTN). As of now, businesses with a turnover above ₹10 crore are required to use e-invoicing. TallyPrime integrates seamlessly with this system, simplifying compliance.

Applicability of e-Invoicing

e-Invoicing is mandatory for businesses with an annual aggregate turnover exceeding ₹5 crore (as of 2023). This threshold ensures that medium and large businesses adhere to e-invoicing, improving tax compliance across the ecosystem. Certain entities, such as businesses registered under the Composition Scheme, SEZ units, and government departments, are exempt from e-invoicing requirements.

Integration with Tally 5.0

Tally 5.0 simplifies the implementation of e-invoicing, making it a preferred choice for businesses. It automates the process by integrating directly with the Invoice Registration Portal (IRP) and ensuring compliance with GSTN-prescribed formats. Businesses can enable the e-invoicing feature in Tally, configure their GST details, and generate invoices with IRNs and QR codes directly within the software. Tally also validates data to minimize errors, reducing the risk of non-compliance.

How e-Invoicing Works in Tally

1. Activation: Users activate the e-invoicing feature in Tally's settings.
2. Data Upload: GST invoice details are automatically uploaded to the IRP.
3. IRN and QR Code: The IRP generates the unique IRN and QR code, which are retrieved and embedded in the invoice.
4. GST Filing Integration: The e-invoicing process syncs with GST return filings, populating details in GSTR-1.

How to Generate a GST Invoice Using TallyPrime

Generating a GST invoice using TallyPrime is straightforward:

Set Up GST in TallyPrime

Before you start generating invoices, ensure that GST is enabled in TallyPrime and your company details are configured for GST compliance.

1. Enable GST:
   • Open TallyPrime and go to Company Information.
   • Under the Statutory and Taxation section, enable GST.
   • Enter your GSTIN (Goods and Services Tax Identification Number) for your company and, if applicable, your GST registration type (e.g., Regular, Composition, etc.).
2. Set GST Rates:
   • Go to Accounting Masters and set up the GST rates applicable to your products or services. TallyPrime provides predefined GST tax rates (e.g., 5%, 12%, 18%, 28%), or you can create your own based on your needs.
3. Configure Stock Items (For Goods):
   • If you are invoicing goods, create the stock items and assign them the relevant HSN (Harmonized System of Nomenclature) code and applicable GST rates.
   • For services, you’ll need to configure the service items and assign them the appropriate SAC (Services Accounting Code) and GST rates.

Create or Select a Ledger for GST Invoice

You need to ensure that all the ledgers involved in the transaction are set up correctly with the appropriate GST details:

1. Go to Create Ledger under Accounts Info.
2. Create ledgers for Sales, GST Receivable, and GST Payable (if they aren't already set).
3. Assign GST Classification to each ledger (e.g., Output GST, Input GST, CGST, SGST, IGST, etc.).
4. Ensure that the party ledger (customer or supplier) has the GSTIN and correct place of supply information.

Start the GST Invoice

Once the setup is complete, you can start generating your GST invoice:

1. Go to the Gateway of Tally and select Vouchers.
2. Choose the type of voucher:
   • For sales of goods, select Sales Voucher (F8).
   • For sales of services, also use Sales Voucher but ensure you select the correct service items.
3. Fill in the Invoice Details:
   • Party Name: Select the customer from the Ledger list.
   • Date: Set the correct invoice date.
   • Item Details: Enter the products or services you're selling.
     • For goods, select the stock item and enter the quantity, rate, and taxable value.
     • For services, select the service item, and enter the service value and applicable GST rates (CGST, SGST, or IGST).
   • GST Calculation: TallyPrime will automatically calculate CGST, SGST, or IGST based on the state of supply.
   • HSN/SAC Code: Tally will automatically fetch the correct HSN/SAC code based on your stock or service item setup.
4. Check the Invoice Summary:
   • Verify that the total taxable amount and GST breakup (CGST, SGST, IGST) are correctly calculated.
   • If applicable, include any discounts or additional charges that affect the final amount.

Finalize and Save the Invoice

1. Once the details are filled in, press Enter to complete the transaction.
2. TallyPrime will prompt you to save the invoice. You can also print the invoice directly from the voucher screen or email it to the customer.
3. The system will generate a unique invoice number automatically, and you can also set a custom numbering system.

Review and Reconcile

• After generating the GST invoice, you can go to the Sales Register or Ledger report to review and reconcile all GST transactions.
• TallyPrime ensures that the correct GST filing format (GSTR-1, GSTR-3B) is followed and facilitates seamless GST return filing.

Watch Video on Invoice Matching under GST

Know More about Invoices in GST

• E-Invoice in GST
• How to Generate E-Invoice in GST
• How to Transit to E-Invoice System
• Who Should Issue an E-Invoice in GST
• Working of E-Invoice System
• Date of implementing e-invoicing in GST

E-Way Bill

• E-Way Bill
• How to Register E-Way Bill
• How to Generate Bulk E-Way Bill

GST

• GST Invoicing Software
• GST Calculator
• New GST Returns & Forms