GST Tax Invoice Explained – Section 31 of GST

Tax invoices play a crucial role in the GST framework, serving as an essential document for compliance, input tax credit (ITC) claims, and record-keeping. Section 31 of the CGST Act, 2017, lays down the legal provisions regarding tax invoices, including their issuance, format, and requirements.

In this blog, we will explore the key provisions of Section 31 of the CGST Act to help businesses understand their obligations and ensure GST compliance.

What is a Tax Invoice?

A tax invoice is a commercial document issued by a registered supplier of taxable goods or services. It contains details such as the description, quantity, and value of goods or services, the applicable GST rate, and the amount of tax charged. A tax invoice serves as a legal record for transactions and is essential for claiming input tax credit (ITC).

Issuance of Tax Invoice for Goods

A registered person supplying taxable goods must issue a tax invoice:

• Before or at the time of removal of goods if the supply involves movement of goods.

• At the time of delivery or making the goods available to the recipient in other cases.

The invoice must include essential details like the description, quantity, value of goods, applicable GST, and other prescribed particulars.

Issuance of Tax Invoice for Services

A registered person supplying taxable services must issue a tax invoice:

• Before or after the provision of service but within the prescribed period.

The invoice should include details such as the description of services, value, applicable GST, and other required particulars.

Revised Invoices for New Registrants

A registered person can issue a revised invoice within one month from the issuance of the certificate of registration for supplies made between the effective date of registration and the date of certificate issuance.

Exemptions from Issuing a Tax Invoice

A tax invoice is not required if:

• The value of goods or services supplied is less than INR 200, subject to prescribed conditions.

• The supplier deals in exempted goods or services or is registered under the Composition Scheme (Section 10 of CGST Act). Instead, a bill of supply must be issued.

Receipt and Refund Vouchers for Advance Payments

• If a supplier receives advance payment for goods or services, they must issue a receipt voucher acknowledging the payment.

• If no supply occurs after the advance payment, the supplier must issue a refund voucher to the payer.

Tax Invoice for Reverse Charge Mechanism (RCM)

If a registered person is liable to pay tax under Section 9(3) or 9(4) (Reverse Charge Mechanism), they must:

• Issue an invoice for purchases from an unregistered supplier.

• Issue a payment voucher at the time of making payment to the supplier.

Tax Invoice in Case of Continuous Supply of goods

If goods are supplied continuously with successive statements of accounts or payments, an invoice must be issued before or at the time of each statement or payment.

Tax Invoice in Case of 

Continuous Supply of Services

For services provided continuously:

• If the due date is fixed in the contract, the invoice must be issued on or before the due date.

• If no due date is specified, the invoice must be issued at the time of receiving payment.

• If payment is linked to an event (e.g., project completion), the invoice must be issued on or before the event completion date.

Special Provision for Goods Sent on Approval

If goods are sent on approval before finalizing the sale, an invoice must be issued before or at the time of supply or within six months from the date of removal, whichever is earlier.

Conclusion

Understanding and complying with Section 31 of the CGST Act is crucial for businesses to ensure proper GST documentation, claim input tax credits, and avoid penalties. Tax invoices serve as essential records in the GST system, facilitating transparency and accountability in transactions. By adhering to the prescribed guidelines, businesses can streamline their invoicing processes and remain compliant with GST laws.

If you have any queries related to tax invoices under GST, feel free to consult a GST expert like us at +91 9769647582