CGST Section 31 — Tax invoice
CGST Act · Tax invoice
Quick Answer
Section 31 of the CGST Act, 2017 governs Tax invoice. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 31 GST: Tax invoice — eligibility, conditions, case laws and compliance impact under Indian tax law.
Plain-English Explanation
Section 31 of the CGST Act, 2017, outlines the rules for issuing tax invoices under GST. It essentially mandates when and how a registered supplier must issue a tax invoice for taxable supplies of goods or services, ensuring proper accounting and collection of GST. This section is crucial for businesses as it defines their obligations in documenting sales transactions for GST purposes.
This section applies to any person registered under GST who is making a taxable supply of goods or services. It dictates when a tax invoice needs to be issued, which varies depending on the type of supply:
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For Goods:
- Movement of Goods Involved: The invoice must be issued before or at the time of removal of the goods for supply to the recipient. Think of a factory shipping goods to a distributor; the invoice has to be ready as the goods leave the factory.
- No Movement of Goods: The invoice must be issued before or at the time of delivery of goods or making them available to the recipient. Imagine a customer picking up goods directly from a shop; the invoice must be provided when they take possession.
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For Services: The invoice must be issued before or after providing the service, but within a prescribed period. The specific period is determined by the GST Rules (usually 30 days from the date of supply of service, extendable to 45 days for insurers and banking companies). For example, a consultant provides advice on January 15th; the invoice usually needs to be issued by February 14th.
Several key conditions and exceptions are embedded within Section 31:
- Revised Invoice: A registered person can issue a revised invoice within one month from the date of issuance of the registration certificate. This covers invoices issued between the effective date of registration and the date the certificate was granted. For example, if your GST registration is effective from Jan 1st but you get the certificate on Jan 20th, you can issue revised invoices for sales made between Jan 1st and Jan 20th, incorporating the GSTIN.
- Small Value Supply: No tax invoice is required if the value of the goods or services supplied is less than ₹200 (subject to prescribed conditions). This provides relief for very small transactions.
- Exempted Supplies/Composition Scheme: Instead of a tax invoice, a registered person supplying exempted goods/services or paying tax under the composition scheme (Section 10) must issue a "bill of supply." Again, no bill of supply is needed if the value is less than ₹200.
- Advance Payments: Upon receiving advance payment for a supply, a "receipt voucher" must be issued, acknowledging the payment. If the supply is not eventually made, a "refund voucher" can be issued to refund the advance.
- Continuous Supply: In cases of continuous supply of goods/services (e.g., monthly maintenance contracts), the invoice must be issued before or at the time each statement of account is issued or each payment is received.
- Goods Sent on Approval: For goods sent on approval, the invoice must be issued before or at the time of supply or six months from the date of removal, whichever is earlier.
- Invoice for supplies from unregistered persons: If a registered person is liable to pay tax under reverse charge (Section 9(3) or 9(4)), they must issue an invoice for the goods/services received from an unregistered supplier.
Practical Examples:
- Retail Business: A retail store selling clothes must issue a tax invoice to the customer at the point of sale.
- Software Company: A software company providing annual maintenance services should issue a tax invoice either on or before the due date of payment, as specified in the contract.
- Restaurant: A restaurant needs to issue a bill of supply (not a tax invoice) if it is registered under the composition scheme.
Important Amendments:
The proviso to Section 31(2) has been amended (effective January 1, 2021) to give the government more flexibility in specifying categories of services for which tax invoices must be issued within a prescribed time and manner, or for which alternative documents can be treated as tax invoices, or for which tax invoices may not be required at all. This provides the government with greater control and allows for tailored rules for specific service sectors. Section 31(3)(f) has been amended in 2024, specifying a time limit for the issuance of invoices for supplies received from unregistered persons under reverse charge.
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Browse all case laws →Frequently Asked Questions
What is a tax invoice under CGST Section 31 and what information must it contain?
A tax invoice is a document issued by a registered person under GST, evidencing a supply of goods or services. As per CGST Section 31, it must contain the following information: (a) Name, address and GSTIN of the supplier; (b) A consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters -hyphen or slash symbolized as “-” and “/” respectively, and any combination thereof, unique for every financial year; (c) Date of its issue; (d) Name, address and GSTIN or UIN, if registered, of the recipient; (e) Name and address of the recipient and the address of delivery, along with the State name and its code, if such recipient is un-registered and where the value of the taxable supply is fifty thousand rupees or more; (f) HSN code of goods or Accounting Code of services; (g) Description of goods or services; (h) Quantity in case of goods and unit or Unique Quantity Code thereof; (i) Total value of supply of goods or services or both; (j) Taxable value of the supply of goods or services or both taking into account discount or abatement, if any; (k) Rate of tax (CGST, SGST, IGST, UTGST or Cess); (l) Amount of tax charged in respect of taxable goods or services (Central tax, State tax, Integrated tax, Union territory tax or Cess); (m) Place of supply along with the name of State, in case of supply in the course of inter-State trade or commerce; (n) Address of delivery where the same is different from the place of supply; (o) Whether tax is payable on reverse charge basis; and (p) Signature or digital signature of the supplier or his authorized representative.
When is a tax invoice required to be issued under CGST Section 31?
Under CGST Section 31, a registered person supplying taxable goods must issue a tax invoice before or at the time of: (a) Removal of goods for supply to the recipient, where the supply involves movement of goods; or (b) Delivery of goods or making available thereof to the recipient, in any other case. For services, the invoice must be issued within 30 days from the date of supply of service. In case of banking companies and financial institutions (including NBFCs), the time limit is extended to 45 days.
What is a bill of supply and when is it issued instead of a tax invoice under CGST?
A bill of supply is issued instead of a tax invoice when the supplier is either a registered person paying tax under the composition scheme or supplying exempted goods or services. It does not contain any tax amount as tax cannot be charged in these scenarios.
What are the provisions related to continuous supply of goods or services as per CGST Section 31?
For continuous supply of goods where successive statements of accounts or successive payments are involved, the tax invoice shall be issued before or at the time each such statement is issued or each such payment is received, whichever is earlier. For continuous supply of services, if the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment. If the due date is not ascertainable, the invoice shall be issued before or at the time the supplier receives the payment. If payment is linked to the completion of an event, the invoice must be issued on or before the date of completion of that event.
Are there any specific rules regarding the issuance of invoices for supplies received from unregistered persons under reverse charge?
Yes, as per CGST Section 31(3)(f), a registered person who is liable to pay tax under reverse charge must issue a self-invoice for goods or services received from an unregistered supplier. This self-invoice serves as proof of inward supply and must contain all the details required in a regular tax invoice.
What are the penalties for non-compliance with the provisions of CGST Section 31 regarding tax invoices?
Failure to issue tax invoices, issuing incorrect invoices, or any other non-compliance with CGST Section 31 can attract penalties under the GST law. The penalties can include a general penalty under Section 125 (up to ₹25,000) and may also result in assessment or audit by tax authorities. More severe violations might attract prosecution.
What are the rules regarding issuing consolidated tax invoices under CGST Section 31?
A registered person may not be required to issue a tax invoice if the value of the supply is less than ₹200 (or as notified), and the recipient is unregistered and does not require such invoice. In such cases, the supplier may issue a consolidated tax invoice at the end of each day for all such supplies. This is a relaxation and not mandatory. Also, the value limit can be changed by the government.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Issuance of Tax Invoice for Taxable Goods | A registered person supplying taxable goods must issue a tax invoice before or at the time of removal of goods (if movement is involved) or delivery/making available of goods (in other cases). |
| Contents of Tax Invoice for Taxable Goods | The tax invoice for taxable goods must show the description, quantity, and value of goods, the tax charged thereon, and other prescribed particulars. |
| Issuance of Tax Invoice for Taxable Services | A registered person supplying taxable services must issue a tax invoice before or after the provision of service but within a prescribed period. |
| Contents of Tax Invoice for Taxable Services | The tax invoice for taxable services must show the description, value, tax charged thereon, and other prescribed particulars. |
| Revised Invoice | A registered person can issue a revised invoice within one month from the date of issuance of the registration certificate for invoices already issued during the period from the effective date of registration until the certificate issuance date, in a prescribed manner. |
| Exemption from Issuing Tax Invoice | A registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees, subject to prescribed conditions and manner. |
| Bill of Supply | A registered person supplying exempted goods/services or paying tax under Section 10 must issue a bill of supply instead of a tax invoice, containing prescribed particulars and in a prescribed manner. |
| Exemption from Issuing Bill of Supply | A registered person may not issue a bill of supply if the value of the exempted goods or services or both supplied is less than two hundred rupees. |
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Browse all notifications →Amendment History
Substituted for the proviso " Provided that the Government may, on the recommendations of the Council, by notification and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which-
Inserted by section 122 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.