The Goods and Service Tax Act is the new taxation regime that has repealed the earlier laws and replaced the complete system of indirect taxation in the country. It has come as a unitary law for the diverse ones governing the indirect taxes and made things extremely easier for the taxpayers as well as the government. And with this new law have come a lot of new things. There are new registrations that the taxpayers need to take, and there is a new type for the registration number as well, which is the GSTIN. Also, the returns are different, and their filings as well. Moreover, one of the very important aspects of the indirect tax laws, the invoices, GST has changed the complete system for them. It has come with a GST invoice format in Excel, and to maintain all these invoices, you essentially need good GST billing software.
What is GST Invoice?
We have always seen the consumer forums stressing upon the importance of bills. There have been many campaigns run for making the customers aware that takin a bill, while they purchase anything, is an absolute must for it serves as a proof that you have actually purchased that thing or taken that service from that particular vendor or service provider. Given this importance of bills, we can clearly understand that a bill is an absolute must under the GST Acts because the provision and supply of goods and services are all it governs.
A GST invoice is the bill that a supplier of goods or a service provider creates with the valid rates of the goods and service tax applied to the value of the goods supplied or services provided. This invoice serves as proof that the transaction has actually taken place and that the supplier or service provider has levied and collected GST on behalf of the government.
This invoice is very important for both the supplier or service provider and the customer as well. Here is how!
Importance of GST Invoice
- The GST invoice is a detailed receipt of the entire transaction that has been made. This is what tells the address of delivery, time, and place of delivery, the value of the transaction, the rate of GST applied, and all other necessary details. All this information is necessary to carry out a transaction effectively.
- The GST invoice is the proof that the transaction has happened. With this invoice being issued, neither the supplier or service provider, not the customer can deny the provision of goods and services.
- The GST invoice contains the time and place of the transaction, which is necessary to determine the invoice date, which in turn determines when the GST has to be paid in lieu of that transaction.
- The GST invoice is required to serve as a proof for the claim of the Input Tax credit on the transactions on which you had already paid the tax.
- The GST invoice also helps with the filing of the returns since you have a complete record of all your transactions through those invoices.
- The GST invoices also help you during the time of assessment because you can easily produce a proof that all the transactions you have made are legal and valid.
- The GST invoices help you keep track of GST payments as well, and you can be sure that you do not miss out on any payment at any point in time.
So, with the foregoing points, you can understand that GST invoices are not only important but beneficial as well. In case you lack such an invoice, you can run into a lot of troubles, and one of the biggest of them will be your inability to claim the input tax credit. And this inability can lead your business to huge losses. So, a GST invoice is compliance under the Act that you must strictly follow so that you avail of the benefits accruing from it.
But the question is, how do you create this invoice? Is it just like the normal bills that you create in the ordinary course of your business? Well, no! A GST invoice is very different from a commercial invoice. A commercial invoice is a simple receipt that records the products or services in one column and their values in the other. It can be of different formats depending on business to business. However, the GST invoice is a tax compliant invoice, and it comprises many details.