Eliminate Your Fears and Doubts on Invoicing under New GST Scheme
The Goods and Services Tax is a valid step towards indirect tax reforms, that will combine a large number of Central and State taxes into one tax and prevent double taxation to pave the way for common national market. GST will reduce the overall tax burden of goods on the consumers from the current 25% to 30% to around 17% to 19%. Thus, it would reduce the cost of products for the end user.
An invoice is the primary document used to assess the collection of any tax related to the transfer of goods or services. Under the new Goods and Services Tax (GST) scheme, government is implementing a new, comprehensive invoicing format that should facilitate the computation of taxes on invoiced goods or services.
There will be two types of invoices in the new tax scheme: a tax invoice and a bill of supply.
Tax invoice
When supplying taxable goods or services a registered supplier should issue a tax invoice. Specific rules regarding the use and contents of the invoice apply:
- Bill number of the invoice
- State name and code
- GSTIN/unique ID
- HSN code/accounting code
Bill of supply
A registered supplier will issue a bill of supply when:
- The goods or services supplied are cleared
- The supplier opts to pay taxes under combination Scheme
As per the rules governing the bill of supply:
- Serial number
- Details of receiver
- Particulars of goods
- If the value of the goods or services supplied is less than Rs. 100, there is no need to issue a bill of supply. Instead, the authorized person must generate a stabilized bill of supply for any such supplies transferred during the day.
Benefits of GST
Increase tax levy and improve India’s economic development by breaking tax barriers between States and combining India through a uniform tax rate. It is calculated that India can profit to $15 billion a year by implementing the Goods and Services Tax.
The taxation burden will be splitting equally as between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions.
It will build a transparent and corruption-free tax administration, by simplifying procedures of taxations and reducing the tax burden, though increasing the ambit of taxation.
Since, both Centre and State GST will be collected at the place of Sale of a product, it will be charged on the manufacturing cost only, and hence, the cost of the product will come down. Lower price (approximately 5%-7% for consumer goods) will attract more consumption and thereby help both the manufacturer and the consumer.
Signing the invoice
The authorized representative of the registered person is need to sign the invoice either physically or digitally via Digital Signature Certificate.
Every invoices must support to the rules framed under GST India to avoid amends for non-compliance. Proper invoicing should enable the administration of the successful digital compliance under GST scheme.
Asimot POS is an application service provider partnering with licensed GST Suvidha Providers. To understand how Asimot POS GST can help you with GST compliance, contact us through
