Self-generation of Tax Invoice under GST law Best Billing Software Trivandrum

Self-generation of Tax Invoice under GST law

The concept of reverse charge is not a new subject in GST, and it is a kin to the tax deducted at source (TDS) in the Income tax laws. In this in this article we shall briefly discuss about the self-generation of the invoice under GST.

Clause f of sub-section 3 of Section 31 of CGST Act prescribes a registered person to issue a self-generated invoice and the provision is reproduced for ready reference:-

(f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both.

Thus prima facie following transactions get triggered with the generation of the invoice by the recipient(registered under GST) of the goods or services: –

• Receipt of goods or services or both from an unregistered person u/s 9(4) of CGST Act;
• Recipient liable to pay appropriate tax under Section 9(3) of the CGST Act on the notified goods or services or both from the unregistered person.

Illustration: ABC Ltd (Recipient) is a registered person in GST in the State of Karnataka. In the month of July 2017, ABC Ltd was approached by a local Seller from Bangalore to supply 50 chairs and the value of said chairs was agreed at Rs.25,000 by both the Seller and Recipient. ABC Ltd purchases the said chairs from the Seller in the month of July 2017. Invoking the said provisions of Section 31(3)(f, ABC Ltd is required to issue a self-generated invoice in July 2017 and calculate and remit the appropriate Central Tax (CGSTT) and State Tax (SGST) on the said transaction by 20th August 2017. Chairs are liable to 18% GST (CGST + SGST). Here the self-generated invoice will be for Rs.25000 and Rs.4500 towards 18% tax (CGST +SGST) adding up to Rs.29,500.

In view of preventing unnecessary hardships to the registered persons, the Government has issued a Notification bearing No.8/2017 CT-R and has exempted per day transaction up to Rs.5000 on all the intra-State supplies from all unregistered persons under section 9(4) of the CGST Act. However the said exemption is not available to inter-State supplies and notified goods or services or both u/s 9(3) of CGST Act. Further the self-generated invoice is prescribed and accepted as a valid document to claim Input Tax Credit.

It is always preferable that the registered recipient maintains different sets of invoices for self-generated invoice and tax invoice in a financial year.Self-generated invoice are required to be disclosed in GSTR-2 of the recipient by 15th of the succeeding month.

The template of self-issued invoice is similar to the tax invoice prescribed under regulation 46 of CGST rules which should include the following information, except marking of under reverse charge applicability:

• a. name, address and GSTIN;
• b. a consecutive serial number unique for a financial year;
• c. date;
• d. name, address and GSTIN the recipient (if registered);
• e. name and address of delivery place, with State and its code;
• f. HSN code for goods or services (not mandatory);
• g. description of goods or services;
• h. quantity in case of goods and unit
• i. total value of supply of goods or services or both;
• j. taxable value of the supply of goods or services or both
• k. rate of tax (central tax, State tax, integrated tax, Union territory tax or cess
• l. amount of tax (central tax, State tax, integrated tax, Union territory tax or cess
• m. place of supply or address of delivery if different from the place of supply;
• n. signature or digital signature of authorised representative