What is a Tax Invoice under GST?

A Tax Invoice is a document issued by a seller registered under GST to the buyer on sale of taxable goods or services.

A Tax Invoice is important because:

  1. It is the evidence of the supply of goods or services
  2. It is an essential document for the buyer to avail Input Tax Credit

Tax Invoice should be issued in the following cases:

  1. A Registered Seller supplying taxable goods or services to a Registered Buyer.
  2. Registered Seller supplying taxable goods or services to an Unregistered Buyer.
  3. Registered Seller making an Inter-State stock transfer to a branch in another state.
  4. Input Service Distributor (ISD) distributing GST Credit to its eligible branches.

How many copies of the Tax Invoice should be issued?

In the case of supply of goods, the seller should issue three copies of an invoice:

In the case of supply of services, the seller should issue two copies of an invoice:

What is the time limit to issue a Tax Invoice?

Type of Supply
Time limit
Supply of Goods1. If the supply involves the movement of goods – before or at the time of removal of goods
2. If the supply does not involve the movement of goods – before or at the time of delivery of goods to the recipient
3. In case of continuous supply of goods – before or at the time each statement of account is issued or each successive payment is received
Supply of Service1. In the normal case: within 30 days from the date of supply of service
2. In case of continuous supply of service: within 30 days from the date when each event specified in the contract for payment
3. Where the service provider is a bank or any financial institution: within 45 days of supply of service

FAQs

1. Is it mandatory to write tax invoice on GST invoice?

Yes, a Tax Invoice is compulsory for the supplier of goods and services. It is issued as evidence for transaction and it also acts as proof to claim input credit.

2. What is the difference between a Tax Invoice and a regular Invoice?

Where both the invoices certify the sale of goods and services, a Tax Invoice will also highlight the details of the Goods and Service Tax (GST) associated with that transaction.

3. Who can not show GST in Tax Invoice?

If a supplier is registered under GST, it becomes mandatory for him to shoe GST in Tax Invoice. However, if a supplier is not registered with the GST, he would have to isse a ‘Regular Invoice’.