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Businesses registered under Goods and Services Tax in India are required to issue GST Compliant Invoices to their clients and customers. Here is our guide on basics of a GST complaint invoice and how you can issue one to your clients or customers

What is an Invoice?

By its general definition, an invoice is a document which validates the transfer of ownership of goods or agreement to provide services/completion of services between the supplier and the buyer. In simple words, it’s a document which contains the details about the goods and/or services purchased or agreed to be purchased. Every business transaction which involves the transfer of goods/supply of services shall be backed by a proper invoice. Often during the initial period of the business, people don’t pay attention to the importance of issuing a proper invoice. Your clients, customers, buyers will often judge your business on the basis of your business invoice and if you are not issuing an invoice, you are missing out the opportunity to establish your brand value in the mind of your customers. A typical invoice will include your business name, brand logo, your business communication details, date of invoice issue, description of goods and/or services, price per unit, tax rate applicable, the total amount that needs to be paid and the payment method details.

What is a GST Complaint Invoice?

Now that you understand what an invoice really is, let’s understand how a GST compliant invoice is different from a typical invoice. First of all, every business registered as a regular taxpayer is required to issue a GST compliant invoice. The law requires the business to add a few additional details in the invoice. These details include the GST Registration Number of the business issuing the invoice, the GSTIN of the business receiving the goods and/or services if in case it is a business supply and the receiver is also registered under Goods and Services Tax regime. Place of Supply of goods and/or services, HSN or SAC code is required after the business turnover exceeds a threshold, total GST charged, bifurcation of GST into either IGST or a combination of CGST and SGST. While it can become difficult for new businesses to get into the flow and GST compliance might seem as unwanted effort, you can sign-up for Fingage and automate GST compliant invoicing.

When do you need to issue a GST Complaint invoice in your business?

As soon as you are registered under the Goods and Services Tax law, you are required to transition from a traditional invoice into a GST complaint invoice. If your buyer is another business registered under the GST law. Such a business can claim the input tax credit only when it is issued a GST complaint invoice by the seller or supplier.

How to generate a GST compliant invoice?

Now that we have understood the relevance of GST compliant invoices in a business and who all are required to issue this invoice. The next point to ponder upon is, “How do we issue a GST compliant invoice?”. While the traditional businesses are still printing a physical bill book, this is not the most efficient way of issuing GST invoices. Businesses need to understand that the new tax regime is not just a change in tax law, but also how taxpayers are complying to it. All returns which are required to be filed under the new law are mandatorily required to be filed online. This means that even if you are issuing a physical invoice, at some point you must collate the data into spreadsheets for the tax consultants to file the return on the basis of such data. Thus if you adopt a digital invoicing platform early in your business, you are more likely to save more time in your business compliance journey.

At Fingage, we have built a robust invoicing platform wherein you can automate your billing, collect payments online through partner payment gateways and be GST compliant.

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