GST

Time Limit for the Issuance of Invoices under GST

In this post, we will cover the Time Limit for the Issuance of Invoices under GST, bill of supply, credit notes, debit notes, and supplementary GST invoice.

Under the GST, time limit for business transactions like the issue of invoices, debit notes or supplementary invoices, credit notes have been defined, keeping in mind of the need of the business and further, the necessary guidelines that have been published by the CBEC in order to educate the taxpayers’ community about the awareness for GST Compliance.

Time Limit for the Issuance of a Tax Invoice for the Supply of Goods

• One Time supply

Under the CGST Act, 2017 after successful GST Registration every taxable person has to issue a GST invoice on or before the movement of goods. Tax invoices under GST have to be raised after fulfilling the necessary details as prescribed by the GST Law. The invoice has to be raised on or before the removal of the goods from the supplier’s location to purchaser’s location.

For example, Ram Singh has purchased industrial equipment from Mukesh Mishra of Mumbai for re-sale purpose in Delhi. In this case, the movement of goods is involved, so an invoice has to be raised before the movement of goods from Mumbai. In other words, the invoice should be raised by the supplier when the goods are ready for dispatch or available for the purchase or movement of goods whichever is earlier.

• Continuous Supply of Services

In the case of continuous supply of services like software development or consultancy services or any other continuous supply of services, invoices should be raised when the statement of work completion has been received or the purchaser is liable for a payment to the supplier irrespective of payment received or not, or payment has been received, whichever is earlier.

Time Limit for Issue of Credit Note and Debit Note

When there is a requirement to reduce or increase the earlier raised invoices for the supply of goods or services, either the credit note or debit note has to be issued before of 30^th September of the following financial year, or before 31^st December of the following financial year. The 31^st December has been set as the annual due date for filing of annual returns under the GST Act^[1], whichever is earlier.

Time Limit for Issue GST Invoice in Case of Reverse Charge Liability

The invoice has to be raised by the service receiver on the date of receipts of services from a person who is not mandatorily required to be registered under the GST Act.

In the case of service under the reverse charge being received from a registered supplier under the GST Act, then there is no need to raise an invoice.

Time limit for issue of invoices in case of goods supplied on sales or return/sales on an approval basis

The invoice shall be raised within 6 months from the date of supply or before it is known that supply has taken place.

Time limit for issue of invoices in case milestone payments

 The invoice should be raised before or after completion of each milestone.

Conclusion

Multiple events like raising invoice or making payment for supply of goods or services are triggering tax levy. It implies that the government wants to collect tax at the earliest point.

Read our article: Checklist of Different Types of Reviews / Audit in GST