Under the current regime of service tax, central excise and state VAT, the process for raising invoice and documentation is laid down by the respective authority. Hence, the requirements and procedure for invoicing varies from State to State - increasing the cost of compliance for businesses having multi-state operations. GST will greatly simplify the procedure for raising an invoice by bringing about uniform compliance across the country. Section 28 of the GST Model Law, makes it mandatory for all registered taxable person supplying taxable goods and/or taxable services to issue tax invoices for all supplies.
In case of supply of goods which involves movement of goods, invoice is to be issued before or at the time of removal of goods for supply to recipient. In other cases wherein no movement of goods is involved, invoice is to be issued before or at the time of delivery of goods or making them available to the recipient. In case of supply of services, invoice can be issued before or after the provision of services but within the prescribed time. The prescribed time has been defined as 30 days from the date of supply of service except in case of Banking and Financial Institutions for whom its 45 days.
Time of supply of goods and/or services determines the event when GST needs to be collected. Time of supply varies depending on the type of transaction and industry. Hence, it is important for businesses to under the concept of time of supply.
Place of supply of goods and/or services determines the state to which the tax needs to be paid under GST. Hence, the determination of place of supply is important to determine the right of respective State in India.
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The GST Act and GST Invoice Rules, prescribe the procedures for issuing an invoice. Under GST, an invoice issued by a supplier must contain: