31.1.1 Time limit on supplying taxable goods = Before or at the time of removal or delivery of goods

Question-1 [ICAI-I-Ch8-Q11] [ICAI-I-M19-7(a)(i)-2] [Time limit for issue of invoice on supply of goods]

Sakthi Enterprises, Kolkata entered into a contract with Suraj Enterprises, Surat for supply of goods and the delivery shall be made on or before 31st October. The goods were removed from the factory at Kolkata on 11th October. As per the agreement, the goods were to be delivered on or before 31st October. Suraj Enterprises has received the goods on 14th October. Determine the time of issue of invoice as per the provisions of CGST Act.

Answer

A registered person supplying taxable goods shall issue a tax invoice, before or at the time of removal of goods for supply to the recipient, where the supply involves movement of goods.

Therefore, in the given case, invoice has to be issued on or before, 11th October (the time of removal of goods).

Question-1A [ICAI-I-Ch8-Q1]

Sultan Industries Ltd., Delhi, entered into a contract with Prakash Entrepreneurs, Delhi, for supply of spare parts of a machine on 7th Sep. The spare parts were to be delivered on 30^th Sep. Sultan Industries Ltd. removed the finished spare parts from its factory on 29th Sep. Determine the date by which invoice must be issued by Sultan Industries Ltd. under GST law.

Answer

As per the provisions of section 31, invoice shall be issued before or at the time of removal of goods for supply to the recipient, where the supply involves movement of goods. Accordingly, in the given case, the invoice must be issued on or before 29th September.

Quesiton-1B [ICSI-E-D19-83-1]

Mundra Manufacturing Company of Jaipur on the order placed by Dheeraj Enterprises of Noida for supply of goods despatched the goods from the factory located at Jaipur on 1st March, 2019. The tax invoice for such supply by Mundra Manufacturing Company must be issued on Dheeraj Enterprises on or before......................

(A) 30th March, 2019; (B) 1st March, 2019; (C) 15th March, 2019; (D) 7th March, 2019

Quesiton-1C [ICSI-E-J19-O-92-1]

ABC Ltd. of Mumbai supplied goods to XYZ Ltd. of Delhi under a contract for the goods to be delivered at the factory of the buyers. Goods removed from the factory of ABC Ltd. on 09-08-2018 and were delivered in the factory of XYZ Ltd. of Delhi on 16-08-2018. Invoice for the supplies was raised by ABC Ltd. on 18-08-2018. Payment of the bill was received on 20-09-2018. The time of supply in this case under GST be taken as:

(A) 09-08-2018; (B) 16-08-2018; (C) 18-08-2018; (D) 20-09-2018

31.1.2 Time limit on supplying taxable services = Before or within 30 days from supply of service

Question-1 [ICAI-I-Ch8-Q12] [ICAI-I-M19-7(a)(ii)-2] [Time limit for issue of invoice on supply of services]

Trust and Fun Ltd., an event management company, has provided its services for an event at Kapoor Film Agencies, Mumbai on 5th June. Payment for the event was made on 19th June. Determine the time of issue of invoice as per the provisions of CGST Act.

Answer

A registered person [other than an insurer/banking company/financial institution, including an NBFC] supplying taxable services shall issue a tax invoice before or after the provision of service, but within a period of 30 days from the date of supply of service.

Thus, in the given case, invoice has to be issued within 30 days of 5th June (date of supply of service), i.e. on or before, 5th July.

Quesiton-1A [ICSI-E-D19-85-1]

Tax invoice referred to in Rule 46 of CGST Rules 2017, in case of taxable supply of services shall be issued under Rule-47 of CGST Rules 2017, within a period of .......................... from the date of supply of service.

(A) 7 days; (B) 15 days; (C) 30 days; (D) on the same day

Question-1B [ICSI-E-J21-78-1]

What is the time limit for issuing tax invoice in case of taxable supply of service?

(A) Within 10 days from the date of supply of service

(B) Within 15 days from the date of receipt of consideration for supply of service

(C) Within 30 days from the date of receipt of consideration for supply of service

(D) Within 30 days from the date of supply of service

Question-2 [ICSI-P-D20-O-6a-6] [Time limit for issue of invoice on supply of services + Goods]

Determine by giving brief reasons the requirement and date of issue of tax invoice under CGST Act in each of the following independent cases :

(i) Ritu Manufacturers Pvt. Ltd. of Delhi supplies goods to Prakhar Electronics,  Gurugram, Haryana. The goods were removed from its factory in Delhi on 23rd September, 2019.

(ii) Katyani Security Services Ltd. has provided security services to Royal Jewellers for their Jewellery in the exhibition (JAS-2019) organized at Jaipur on 5th October, 2019.

(iii) Sultan Industries Ltd. of Delhi entered into a contract with Prakash Enterpreneurs of Delhi for supply of spare parts of a machine to them on 27th November, 2019. The spare parts were required to be delivered on 30th November, 2019. Sultan Industries Ltd. removed the finished spare parts from its factory on 29th November, 2019.

Answer

(i) As per section 31(1) of the CGST Act, 2017 a registered person supplying taxable goods required to issue the invoice before or at the time of removal of goods for supply to the recipient, where the supply involves movement of goods.  Ritu Manufacturers in this case, where movement of goods is between Delhi and Gurugram is required to issue a tax invoice on or before removal of the goods from factory i.e. on or before 23rd September, 2019.

(ii) As per section 31(2) of CGST Act, 2017 a registered person supplying taxable services shall before or after the provision of service but within a prescribed period of 30 days issue a tax invoice.  Katyani Security Services Ltd needs to issue a tax invoice within days of supply of security services, i.e. on or before 4th November, 2019.

(iii) As per provisions of section 31, invoice shall be issued before or at the time of removal of goods for supply to the recipient, where the supply involves movement of goods. Accordingly, the tax invoice must be issued by Sultan Industries Ltd. Delhi on or before 29th November, 2019.

31.1.2.1 Time Limit for an insurer or a banking company or a financial institution, NBFC = 45 days from supply of service

Question-1 [ICSI-E-D22-79-1]

In case of taxable supply of services by NBFC company, invoice shall be issued within a period of ........................ from the date of supply of service.

(A) 45 days; (B) 30 days; (C) 60 days; (D) 90 days

Question-2 [ICMAI-I-J19-1(a)(iii)-1]

The period prescribed for issuance of tax invoice in the case of provision of services is

(A) generally 45 days from the date of the supply of service (in case of Banking companies- 30 days from the date of supply).

(B) generally 30 days from the date of the supply of service (in case of Banking companies- 60 days from the date of supply).

(C) generally 30 days from the supply of service (in case of Banking companies - 45 days from the date of supply).

(D) 30 days from the date of supply of service in all cases.

31.1.3 Time limit in case of continuous supply of goods

Question-1 [ICSI-P-J21-2(d)(i)-1.25]

Discuss the provisions of GST laws in respect of the following circumstance:

R.K. Steel company received an order for supply of 1000 ton steel and supplied the same in installments as a continuous supply. What will be the due date of invoice in such transaction ?

Answer

As per Section 31 of the Central Goods and Services Tax Act, 2017 in case of continuous supply of goods where successive statements of accounts or successive payments are involved the invoice shall be issued before or at the time each such statement is issued or as the case may be each such payment is received.

Hence, in this case, R. K. Steel Company shall issue invoice either before or at the time of issuance of account statement or at the time of receipt of each payment.

31.1.4 Time limit in case of continuous supply of services

Quesiton-1 [ICSI-E-J19-O-79-1] [Meaning of Continuous supply of service]

A service shall be a continuous supply of service agreed to be provided continuously or on recurrent basis under a contract when the period of service exceeds:

(A) 1 month; (B) 3 months; (C) 6 months; (D) One year

Quesiton-1A [ICSI-E-D19-O-78-1]

XYZ & Associates is a firm of Company Secretaries at Delhi. It agreed to provide continuous services to members of FICCI by entering into an agreement. In order to consider the service as continuous service, the period of service must exceed:

(A) 1 month; (B) 3 months; (C) 6 months; (D) 12 months

Question-2 [ICAI-I-Ch8-Q2] [Due Date of payment is ascertainable]

MBM Caretakers, a registered person, provides the services of repair and maintenance of electrical appliances. On April 1, it has entered into an annual maintenance contract with P for its Air Conditioner and Washing Machine. As per the terms of contract, maintenance services will be provided on the first day of each quarter of the relevant financial year and payment for the same will also be due on the date on which service is rendered. During the year, it provided the services on April 1, July 1, October 1, and January 1 in accordance with the terms of contract. When should MBM Caretakers issue the invoice for the services rendered?

Answer

Continuous supply of service means, inter alia, supply of any service which is provided, or agreed to be provided continuously or on recurrent basis, under a contract, for a period exceeding 3 months with the periodic payment obligations.

Therefore, the given situation is a case of continuous supply of service as repair and been by Caretakers on a quarterly basis, under a contract, for a period of one year with the obligation quarterly payment.

In terms of section 31, in case of continuous supply of service, where due date of payment ascertainable from the contract (as in the given case), invoice shall be issued on or before the date of payment.

Therefore, in the given case, MBM Caretakers should issue quarterly invoices on or before April 1 July 1, October 1, and January 1.

Quesiton-3 [ICAI-I-N18-11b-5] [Continuous supply of services]

Mr. Lakhan provides Continuous Supply of Services (CSS) to M/s. TNB Limited. He furnishes the following further information:

(i) Date of commencement of providing CSS - 01-10-2017

(ii) Date of completion of providing CSS - 31-01-2018

(iii) Date of receipt of payment by Mr. Lakhan - 30-03-2018

Determine the time of issue of invoice as per provisions of CGST Act, 2017, in the following circumstances:

(i) If no due date for payment is agreed upon by both under the contract of CSS.

(ii) If payment is linked to the completion of service.

(iii) If M/s. TNB Limited has to make payment on 25-03-2018 as per the contract between them

Answer

(i) Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment.

Thus, in the given case, the invoice should be issued on or before 30.03.2018 (date of receipt of payment by Mr. Lakhan).

(ii) If payment is linked to the completion of an event, the invoice should be issued on or before the date of completion of that event.

Since in the given case payment is linked to the completion of service, invoice should be issued on or before 31.01.2018 (date of completion of service).

(iii) Where the due date of payment is ascertainable from the contract, the invoice should be issued on or before the due date of payment.

If M/s. TNB Limited has to make payment on 25.03.2018 as per the contract between them, the invoice should be issued on or before 25.03.2018.

Quesiton-3A [ICAI-I-M19-O-8b-2]

Jolla provides continuous supply of services regarding Annual Maintenance Contract (AMC) of Air conditioner and all electronic items of Khotu Ltd. He provides following details regarding same:

They made contract for the AMC. As mentioned in contract, AMC will start from 01-10-2017 and will be valid for a year. AMC ends on 30-09-2018. Jolla receives payment for the AMC on 31-10-2018.

Explain the time of issue of invoice in case of Continuous supply of Service (CSS) as per provisions of CGST Act, 2017 and accordingly determine time of issue of invoice in following different circumstances:

(1) As mentioned in contract, Khotu Ltd. have to make payment on 05-11-2018.

(2) If terms of contract, payment is not mentioned in AMC and also not agreed by both the parties.

Answer

(1) Statutory Provision

Section 31(5) - In case of continuous supply of services

(i) Where due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment.

(ii) Where due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment

(iii) Where payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.

In view of the aforesaid provisions, time of issue of invoice will be as follows in the given different circumstances:

(1) If it is mentioned in contract that Khotu Ltd. has to make payment on 05.11.2018, the invoice shall be issued on or before 05.11.2018.

(2) If terms of payment are not mentioned in AMC and are also not agreed by both the parties, the invoice shall be issued on or before 31.10.2018.

Note: The question has been answered by considering the annual maintenance contract as continuous supply of service. However, as per section 2(33) of the CGST Act, 2017 “continuous supply of services” inter alia means a supply of services with periodic payment obligations.

Question-3B [ICAI-F-M18-O-6(b)(iii)-1] [ICSI-P-D22-3(d)(iii)-1]

Discuss the provisions relating to issue of an invoice/document in the following circumstances:

Malcolm provides continuous supply of services to his client, where the due date of payment for such services is not ascertainable. No advance has been received in this behalf. 

Answer

As per section 31(5)(b) of CGST Act, 2017, in case of continuous supply of services, where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment.

Question-4 [ICSI-E-D18-6b-3] [Goods + Services + Continuous Supply]

Examine the following independent cases of supply of goods and services, and state in each of the cases, when should a tax invoice be issued by the person making supplies, as per the provisions of the CGST Act, 2017:

(i) Meenakshi Enterprises, Kolkata makes a supply of goods to Dhirani Enterprises, Ghaziabad. The goods were removed from the factory at Kolkata on 3rd September, 2017. Same is received by the buyer on 5th September,2016.

(ii) Mohan Ltd., an event management company, has provided its services for an event at Photo Film Agencies at Mumbai, on 1st Nov., 2017.

(iii) Seema & Co. has entered into an Annual Maintenance Contract (AMC) with Vir Enterprises for one-year, effective 1st Nov., 2017 for the stabilizers installed in the factory.

Answer

(i) As per section 31 (1) of CGST Act, 2017, tax invoice shall be issued before or at the time of (a) removal of goods, where the supply involves movement of goods or (b) delivery of goods or making available thereof to the recipient in any other case. In the given case, the tax invoice for the goods removed on 3rdSeptember 2017 must be issued on or before 3rd September, 2017.

(ii) As per section 31 (2) of CGST Act, 2017 read with rule 47 of CGST Rules, 2017, tax invoice in case of supply of services shall be issued before or after the provision of services but within a period of 30 days from the date of supply of service. In the given case, the tax invoice must therefore be issued within 30days of providing service, that is by 30th Nov. 2017.

(iii) As per section 31(5) of CGST Act, 2017 in case of continuous supply of services:

(a) where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment;

(b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;

(c) where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.

Since the question does not provide due date of payment, assuming that date of entering into AMC contract is due date of payment, hence the tax invoice shall be issued on or before 1st November, 2017.

31.1.6 Time limit on Supply of Goods on Approval Basis [Sale or Return Basis]

Question-1 [ICAI-F-M18-O-6(b)(ii)-1] [ICSI-P-D22-3(d)(ii)-1] [Provision of Section 31(7)]

Discuss the provisions relating to issue of an invoice/document in the following circumstances:

Goods are sent on approval for sale or return and are removed before the supply takes place.

Answer

As per section 31(7) of CGST Act, 2017, where the goods are sent on approval for sale or return and are removed before the supply takes place, the invoice shall be issued before or at the time of supply or 6 months from the date of removal, whichever is earlier.

Question-2 [ICSI-P-J21-2(d)(ii)-1.25] [Time limit for issue of invoice]

What will be the due date of invoice if goods sent on approval for sale or return ?

Answer

Section 31(7) of the Central Goods and Services Tax Act, 2017 provides that where the goods are being sent or taken or approved for sale or return are removed before the supply takes place, then the invoice shall be issued before or at the time of supply or six month from the date of removal whichever is earlier.

Question-3 [ICSI-E-D22-65-1] [Deemed supply after due date]

A dealer sent some goods to another dealer for Sales on Approval Basis. In absence of any confirmation even after 6 months, it will be treated as ............... of CGST Act, 2017.

(A) Sales Return (B) Purchase Return (C) Deemed Supply of Goods(D) Deemed Sales Return

Question-4 [ICAI-I-M22-7a-4]

M/s. Xing Trans of Kolkata is engaged in the trading of transmitters. On 20/05/2021, M/s. Xing Trans has sent 500 units of transmitters for exhibition at Chennai on sale or return basis. Out of the said 500 units, 300 units have been sold on 28/07/2021 at the exhibition. Out of remaining 200 units, 150 units have been brought back to Kolkata on 25/11/2021 and balance 50 units have neither been sold nor brought back.

Explain the provisions under GST law relating to issue of invoices with exact dates on which tax invoices need to be issued by M/s. Xing Trans.

Answer

Statutory Provision

Section 31(7) - where the goods being sent or taken on approval for sale or return are removed before the supply takes place, invoice shall be issued earlier of

before or at the time of supply or

6 months from the date of removal

Facts

500 units sent on 20/05/2021

300 units sold on 28/07/2021

150 units brought back on 25/11/2021

Conclusion

In the given case, 500 units of transmitters have been sent for exhibition on sale or return
basis out of which 300 units are sold before 6 months from the date of removal. Thus, tax
invoice for said 300 units needs to be issued before or at the time of supply of such goods,
i.e. upto 28/07/2021.

Remaining 200 (150+ 50) units have neither been sold nor brought back till the expiry of 6
months from the date of removal goods, i.e. 20/11/2021. Thus, tax invoice for said 200
units needs to be issued upto 20/11/2021

31.2 Contents of Tax Invoice

Quesiton-1 [ICSI-P-D20-O-5(a)-3] [GST Rate & GST to be shown separately]

Kamdhuda Enterprises, a partnership firm applied for registration under the GST law and obtained the same on 10th January, 2020. Partners of the firm to keep the rates confidential for the goods sold want to show in the GST invoices to be raised consolidated amount which is inclusive of the amount of the GST for the concerned product sold. Advise the firm, whether this will be in accordance with the CGST Act, 2017 and can they do so.

Answer

Rule 46 of the CGST Rules, inter alia, postulates that tax invoice to be issued by the registered person shall contain the following particulars:

(i) Taxable value of supply of goods or services or both;

(ii) Rate of tax (Central tax, State tax, Integrated tax, Union territory tax or cess)

(iii) Amount of tax charged in respect of taxable goods or services (Central tax, State tax, Integrated tax, Union territory tax or cess)

Therefore, the supplier is bound to mention the above listed details separately in the tax invoice to be issued for the product sold.

The proposed action of showing consolidated amounts in the tax invoices as contended by the partners of Kamdhuda Enterprises is incorrect and is not tenable in law under the CGST Act, 2017.

Quesiton-1A [ICMAI-I-D19-4(a)-5]

Mr. Kamal Tripati, a supplier who has recently taken registration under the GST law, wants to keep the rates for goods supplied confidential. He wants to know whether he can raise the tax invoices showing consolidated value of the goods supplied and the GST together. He will be making Inter-State supplies also. Advise Kamal Tripati suitably, having regard to the provisions of the CGST Act, 2017.

Answer

Essentials of tax invoice under GST Section 31 of the CGST Act, 2017 read with the CGST Rules, 2017, inter alia, provides that tax invoice shall contain the following particulars –

(a) Total value of supply of goods or services or both;

(b) Rate of tax (here SGST and CGST)

(c) Amount of tax charged in respect of taxable goods or services (here SGST and CGST)

Therefore, the supplier is bound to show all the above separately in the tax invoice.

His proposed action is incorrect and not tenable in law.

Advice should be given on the above lines.

Quesiton-2 [ICSI-P-D21-2A(ii)-5]

Goyal Fashions, a registered supplier of designer outfits in Delhi, decided to exhibit its products in a Fashion Show being organized at Hotel Part Royal, Delhi on 04.01.2021 Goyal Fashion for the occasion, gets the makeover of its models done by Galaxy Beauty Services Ltd, Ashok Vihar, Delhi for which a consideration of Rs.5,00,000 (excluding GST) has been charged. Galaxy Beauty Services Ltd, issued a duly signed tax invoice on 10.02.2020 showing the lumpsum amount of Rs.5,90,000 inclusive of CGST and SGST @ 9% each. Goyal Fashions made the payment the very next day.

Answer the following questions in the context of provisions of the CGST Act, 2017 :

(a) Examine and state whether the tax invoice has been issued within the time limit prescribed under the law by Galaxy Beauty Services Ltd.

(b) Tax consultant of Goyal Fashions objected to the invoice raised suggesting that the amount of tax charged in respect of the taxable supply should be shown separately in the invoice raised by Galaxy Beauty Services Ltd. However, Galaxy Beauty Services Ltd, contended that there is no mandatory requirement of showing tax component separately in the invoice. Examine and State the validity of the objection raised by tax consultant of Goyal Fashions.

Answer

IF CANDIDATES ASSUMED DATE OF ISSUE OF COMPLETION OF SERVICE: 04.01.2021 & DATE OF ISSUE OF INVOICE: 10.02.2020

(a) As per section 31 of the Central Goods and Services Tax Act, 2017 read with the Central Goods and Services Tax Rules, 2017, in case of taxable supply of services, invoices should be issued before or after the provision of service, but within a period of 30 day (45 days in case of insurer, Banking company or financial institutions including NBFCs) from the date of supply of service. In the present case, the tax invoice should have been issued in the prescribed time limit of 30 days from the date of supply of service i.e., up-to 03.02.2021 and invoice has been issued on 10.02.2020. This is issued within time limit.

(b) Section 31 of the Central Goods and Services Tax Act, 2017 read with the Central Goods and Services Tax Rules, 2017, inter alia, provides that tax invoice shall contain the following particulars:

(i) Total value of supply of goods or services or both,

(ii) Rate of tax (Central tax, State tax, Integrated tax, Union territory Tax or Cess)

(iii) Amount of tax charged in respect of taxable goods or services (Central tax, State tax, Integrated tax, Union Territory Tax or Cess)

The objection raised by the tax consultant of Goyal Fashions suggesting that the amount of tax charged in respect of the taxable supply should be shown separately in the invoice raised by Galaxy Beauty Services Ltd, is valid in law. In the present case, the tax amount has not been shown separately in the invoice.

31.3.1 Nos. of HSN digits required on tax invoice

Question-1 [ICSI-E-D18-O-72-1]

The assessee is required mandatorily to mention the Harmonized System Nomenclature (HSN) or Service Accounting Code (SAC) on the tax invoice of the product or service supplied under GST:

(A) having a turnover of Rs.2 crore and above

(B) having a turnover of Rs.3 crore and above

(C) having a turnover of Rs.4 crore and above

(D) having a turnover of Rs.5 crore and above

Question-1A [ICSI-E-D21-O-73-1]

What is the limit of turnover for mandatory maintenance of the HSN/SAC code of the product or the services on the invoice?

(A) Rs.5 crores; (B) Rs.10 crores; (C) Rs.20 crores; (D) Rs.50 crores

Question-2 [ICSI-E-D21-O-74-1]

What is the full form of HSN?

(A) Harmonized System Name; (B) Harmonized System Number; (C) Harmonized System Nomenclature; (D) Harmonized Serial Number

Question-3 [ICSI-P-D21-O-6b-3]

Mr. Musafir of Jharkhand, engaged in supply of medical drugs has an aggregate turnover of Rs.7 Crore in the financial year 2020-2021. He issues invoices to customers without mentioning the HSN Code for goods to customers till date.

(i) State whether he is liable to mention such HSN Codes. If so, state the digit of HSN code to be mentioned in tax invoices issued to customers.

(ii) Would your answer be different if his aggregate turnover in Financial Year 2020-21 is Rs.4.5 Crore and tax invoice being issued to the unregistered persons.

31.5.3 Notified RPs who shall prepare e-invoice

Question-1 [ICSI-P-J21-O-6c-2] [Meaning of e-invoice]

What is E-invoicing and who are mandatorily required to upload such E-invoices.

Answer

Electronic Invoicing is the introduction of the digital invoice for goods and services provided by the business firms generated at the government portal. It is a system in which all Business-to-Business invoices or for export are electronically uploaded and authenticated by the designated portal and the asseessee gets QR Code embedded with Invoice Reference Number which is mandatorily required to be printed on the tax invoice.

With effect from 1.10.2020, the Central Government has made E-invoicing mandatory for taxpayer (other than SEZ unit and those referred to in sub-rules (2), (3), (4) and (4A) of rule 54 of the said rules,) whose aggregate turnover exceeds Rs. 500 Crores in any of the financial year from 2017 – 18.

31.6.1 RP having AT> Rs.500 Cr shall have Dynamic QR code on B2C invoice

Question-1 [ICSI-E-D22-80-1]

Dynamic Quick Response (QR) Code is applicable to suppliers who issue invoice to unregistered person exceeding :

(A) Rs.l.5 crores; (B) Rs.5 crores; (C) Rs.50 crores; (D) Rs.500 crores

31.6.2 Non applicability of Dynamic QR Code on B2C invoice

Question-1 [ICAI-I-N21-8(b)-5]

Is Dynamic Quick Response (QR) Code applicable to suppliers who issue invoice to unregistered persons? If no, list the suppliers to whom Dynamic QR Code is not applicable.

Answer

Dynamic QR code is applicable to invoices issued in respect of supplies made to unregistered persons by a registered supplier provided its aggregate turnover in any preceding financial year from 2017-18 onwards exceeds ` 500 crores.

However, it is not applicable to following suppliers issuing invoices to unregistered persons:-

(i) Insurer or banking company or financial institution including NBFC

(ii) GTA supplying services in relation to transportation of goods by road in a goods carriage

(iii) Supplier of passenger transportation service

(iv) Person supplying services by way of admission to exhibition of cinematograph films in multiplex screens

(v) Supplier of online information and database access or retrieval (OIDAR) services

Question-1A [ICAI-F-M22-6(a)-4]

Enumerate the suppliers to whom the Dynamic Quick Response (QR) code is not
applicable when they issue an invoice to an unregistered person

Answer

Dynamic Quick Response (QR) code is not applicable to following suppliers when they issue an invoice to an unregistered person:-

(i) Insurer or banking company or financial institution including NBFC

(ii) GTA (Goods transport agency) supplying services in relation to transportation of goods by road in a goods carriage

(iii) Supplier of passenger transportation service

(iv) Person supplying services by way of admission to exhibition of cinematograph films in multiplex screens

(v) Supplier of OIDAR (online information and database access or retrieval) services.

(vi) In case of exports

31.7.1 Revised Invoice from effective date of registration till the date of issuance of RC

Question-1 [ICAI-I-Ch8-Q3] [Revised Invoice from effective date of registration]

The aggregate turnover of Sangri Services Ltd., Delhi, exceeded Rs.20 lakh on 12th August. applied for registration on 3rd September and was granted the registration certificate on 6th September. You are required to advice Sangri Services Ltd. as to what is the effective date of registration in case. It has also sought your advice regarding period for issuance of Revised Tax Invoices.

Answer

As per section 25 read with CGST Rules, where an applicant submits application for within 30 from the date he becomes liable to registration, effective date of registration is the date on becomes liable to registration. Since, Sangri Services Ltd.’s turnover exceeded Rs.20 lakh on 12th August, it became liable to registration on same day. Further, it applied for registration within 30 days of so becoming liable to registration, the effective date of registration is the date on which he becomes liable to registration, i.e. 12th August.

As per section 31 read with CGST Rules, every registered person who has been granted registration with effect from a date earlier than the date of issuance of certificate of registration to him, may issue Revised Tax Invoices. Revised Tax Invoices shall be issued within 1 month from the date of issuance of certificate of registration. Revised Tax Invoices shall be issued within 1 month from the date of issuance of registration in respect of taxable supplies effected during the period starting from the effective date of registration till the date of issuance of certificate of registration.

Therefore, in the given case, Sangri Services Ltd. has to issue the Revised Tax Invoices in respect of taxable supplies effected during the period starting from the effective date of registration (12th August) till the date of issuance of certificate of registration (6th September) within 1 month from
the date of issuance of certificate of registration, i.e. on or before 6th October.

31.7.2 Consolidated Revised tax Invoice for taxable supplies to URP

Question-1 [ICAI-I-Ch8-Ill-1]

Luv & Kush Pvt. Ltd. of Meghalaya engaged in the supply of gifts items and repair services, provides you the following details:

The company seeks your advice as to how it should raise revised tax invoices for supplies made. Is there any specific provision for issuance of revised tax invoices to unregistered customers? Explain.

Answer

A supplier of both goods and services whose aggregate turnover in a financial year exceeds Rs.20 lakh in a State/UT [Rs.10 lakh in specified Special Category States] is liable to apply for registration within 30 days from the date of becoming liable to registration (i.e., the date of crossing threshold limit of Rs.20 lakh/ Rs.10 lakh) in terms of section 22. Since Meghalaya is not a specified Special Category State, applicable threshold limit is Rs.20 lakh.

Further, where the application is submitted within said period, the effective date of registration is the date on which the person becomes liable to registration; otherwise it is the date of grant of registration.

Every registered person who has been granted registration with effect from a date earlier than the date of issuance of registration certificate to him, may issue revised tax invoices within 1 month from the date of issuance of registration certificate in respect of taxable supplies effected during this period i.e. from the effective date of registration till the date of issuance of
registration.

Since Luv & Kush Pvt. Ltd. has made the application for registration within 30 days of becoming liable for registration, the effective date of registration becomes the date on which the company becomes liable to registration i.e. 5th September.

Thus, Luv & Kush Pvt. Ltd. may issue revised tax invoices against the  invoices already issued during the period between effective date of registration (5th September) and the date of issuance of registration certificate (6th October), within 1 month from 6th October.

Further, Luv & Kush Pvt. Ltd may issue a consolidated revised tax invoice in respect of all taxable supplies made to unregistered dealers during such period. However, in case of inter-State supplies made to unregistered dealers, a consolidated revised tax invoice cannot be issued in respect of all the recipients located in a State, if the value of a supply exceeds Rs.2,50,000.

Question-2 [ICAI-I-M18-O-11(b)-4] [Revised Invoice from effective date of registration + Revised invoice to URP]

Chidanand Products Pvt. Ltd. started its business of supply of goods on 1st Aug, 2017. It's turnover exceeds Rs.20,00,000 on 5th Sep, 2017. It applied for registration on 28th Sep, 2017 & granted registration certificate on 6th Oct, 2017. Guide the company regarding invoices to be issued between 5th Sep, 2017 to 6th Oct, 2017 to registered dealers. Further it had also made supplies to unregistered dealers in that period. How it can raise invoices?

Answer

A supplier whose aggregate turnover in a financial year exceeds Rs.20 lakh in a State/UT is liable to apply for registration within 30 days from the date of becoming liable to registration (i.e, the date of crossing the threshold limit of Rs.20 lakh) vide section 22 of CGST Act, 2017.

Where the application is submitted within the said period, the effective date of registration is the date on which the person becomes liable to registration; otherwise it is the date of grant of registration.

Every registered person who has been granted registration with effect from a date earlier than the date of issuance of registration certificate to him, may issue revised tax invoices in respect of taxable supplies effected during this period within 1 month from the date of issuance of registration certificate.

In view of the aforesaid provisions, Chidanand Products Pvt. Ltd may issue revised tax invoices against the invoices already issued during the period between effective date of registration (5th September, 2017) and the date of issuance of registration certificate (6^th October, 2017), within 1 month from 6th October, 2017.

Further, Chidanand Products Pvt. Ltd may issue a consolidated revised tax invoice in respect of all taxable supplies made to unregistered dealers during such period. However, in case of inter-State supplies made to unregistered dealers, a consolidated revised tax invoice cannot be issued if the value of a supply exceeds Rs.2,50,000.

31.7.3 Contents of Revised Tax Invoice

Quesiton-1 [ICMAI-I-J18-7c-2.5]

Write short notes on contents of revised tax invoice.

31.8.1 In Place of Tax Invoice, Consolidated Tax Invoice may be issued if value of supplies < Rs.200

Question-1 [ICAI-I-Ch8-Ill-2]

Jain & Sons is a trader dealing in stationery items. It is registered under GST
and has undertaken following sales during the day:

None of the recipients require a tax invoice [Raghav Traders being a composition dealer].

Determine in respect of which of the above supplies, Jain & Sons may issue a Consolidated Tax Invoice instead of Tax Invoice, at the end of the day

Answer

In the given illustration, Jain & Sons can issue a Consolidated Tax Invoice only with respect to supplies made to Oberoi Orphanage [worth Rs.188] and Aaradhya [worth Rs.158] as the value of goods supplied to these recipients is less than Rs.200 as also these recipients are unregistered and don’t require a tax invoice.

As regards the supply made to Raghav Traders, although the value of goods supplied to it is less than Rs.200, Raghav Traders is registered under GST. So, Consolidated Tax Invoice cannot be issued.

Consolidated Tax Invoice can also not be issued for supplies of goods made to Dhruv Enterprises and Gaurav although both of them are unregistered. The reason for the same is that the value of goods supplied is not less than Rs.200.

31.9.1 Bill of Supply may be issued for Exempt supplies/by Composition Dealer

Question-1 [ICAI-I-Ch8-Q4] [Invoice by Composition dealer]

Shyam Fabrics has opted for composition levy scheme in the current financial year. It has approached you for advice whether it is mandatory for it to issue a tax invoice. You are required to advise him regarding same.

Answer

A registered person paying tax under the provisions of section 10 [composition levy] shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed [Section 31(3)(c) read with CGST Rules, 2017].

Therefore, in the given case, Shyam Fabrics cannot issue tax invoice. Instead, it shall issue a Bill of Supply.

Question-1A [ICSI-P-J19-2(a)(iii)-2]

It is mandatory to issue a tax invoice in case a registered person has opted for composition levy scheme’’. [T/F]

Quesiton-2 [ICSI-E-D22-81-1] [Invoice for exempt supply]

Rajendra is registered dealer under GST, supplied the exempted goods to his customer within state, in this case he shall issue:

(A) Tax invoice

(B) Bill of supply

(C) Receipt Voucher

(D) Tax Invoice or Receipt Voucher (as per choice of Assessee)

Quesiton-2A [ICMAI-I-D19-1(a)(v)-1]

The Sale document to be generated by a supplier in case of exempted supply is called
(A) Tax Invoice; (B) Delivery Challan; (C) Bill of Supply; (D) Commercial Invoice

Quesiton-3 [ICSI-P-D20-4(b)(i)-3]

State in brief as per provisions of the CGST Act, 2017, a composition dealer/ supplier how should raise GST bill/invoice for the supply of goods. Explain also what should be prominently stated on such invoice. Specify and state the rates of tax applicable to a dealer opting for composition scheme.

Answer

A composition supplier/dealer cannot issue a tax invoice as per provision of CGST Act, 2017 because a composition dealer cannot charge tax from their customers or from the persons to whom supplies have been made. Composition dealer is required to pay tax from his own and therefore, cannot issue a tax invoice but has to issue a Bill of Supply.

The dealer is required to mention "Composition taxable person, not eligible to collect tax on supplies” at the top of the Bill of Supply.

GST Rate applicable to Composition dealer

31.9.3 Contents of Bill of Supply

Quesiton-1 [ICMAI-F-D18-1(vii)-1]

Following is not a part of the contents of a bill of supply :

(a) Description of Goods or Services or both

(b) Consecutive Serial number

(c) Signature or digital signature if registered of the recipient

(d) Signature or digital signature of the supplier or his authorized representative.

31.10 Single Invoice cum Bill of Supply may be issued for taxable and exempt supply to URP

Question-1 [ICAI-I-Ch8-Q9] [Invoice for Taxable and Exempt supply to URP]

A registered person has to mandatorily issue separate invoices for taxable and exempted goods when supplying both taxable as well as exempted goods to an unregistered person. Examine the validity of the statement.

Answer

The statement is not valid in law. As per the CGST Rules, where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single “invoice-cum-bill of supply” may be issued for all such supplies.

Quesiton-1A [ICAI-I-M18-11(b)(i)-1.5] [ICSI-P-J19-2(a)(i)]

A registered person shall issue separate invoices for taxable and exempted goods when supplying both taxable as well as exempted goods to an unregistered person. [T/F]

Question-2 [ICSI-P-D22-2A(iv)-5] [Invoice for Taxable and exempt + GST Rate]

Raj, a registered supplier, runs a general store in Bhilwara, Rajasthan. Some of the goods sold by him are exempt whereas some are taxable. You are required to advise him on the following issues :

(a) Whether Raj is required to issue a tax invoices in all cases, even if he is selling the goods to the end consumers ?

(b) Raj sells some exempted as well as taxable goods valuing ` 6,000 to a school student. Is he mandatorily required to issue two separate GST documents ?

(c) Raj wishes to know whether it is necessary to show tax amount separately in the tax invoices issued to the customers ?

31.11.1.1 Contents of Receipts Voucher

Question-1 [ICMAI-I-D18-7d-5]

Write short notes on contents of receipts voucher

Question-2 [ICSI-E-J22-55-1]

As per Rule 50 of CGST Rules, 2017, the receipt voucher must contain:

(A) Description of goods or services; (B) Invoice reference; (C) Full value of supply; (D) None of the above

31.11.2 Issue of refund voucher on repayment of advance payment

Question-1 [ICAI-I-Ch8-13] [Issue of refund voucher]

Udai Singh, a registered supplier, has received advance payment with respect to services to be supplied to Sujamal. His accountant asked him to issue the receipt voucher with respect to such services to be supplied. However, he is apprehensive as to what would happen in case a receipt voucher is issued, but subsequently no services are supplied. You are required to advise Udai Singh regarding the same.

Answer

Udai Singh is required to issue a receipt voucher at the time of receipt of advance payment with respect to services to be supplied to Sujamal . A receipt voucher is a document evidencing receipt of advance money towards a supply of goods and/or services or both. A registered person, on receipt of advance payment with respect to any supply of goods or services or both, shall issue a receipt voucher or any other document, evidencing receipt of such payment.

Where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment. Therefore, in case subsequently no services are supplied by Udai Singh, and no tax invoice is issued in pursuance thereof, Udai Singh may issue a refund voucher against such payment to Sujamal.

Quesiton-1A [ICAI-F-M18-O-6(b)(i)-2] [ICSI-P-D22-3(d)(i)-2]

Discuss the provisions relating to issue of an invoice/document in the following circumstances:

Advance payment is received against a supply, but subsequently no supplies are made.

Answer

As per section 31(3)(e) of CGST Act, 2017, where advance payment is received against a supply for which receipt voucher has been issued, but subsequently no supplies are made and no tax invoice is issued in pursuance thereof, a refund voucher has to be issued to the person who had made the advance payment.

31.12.1 Issue of Invoice on inward supply from URP taxable under RCM

Question-1 [ICAI-I-Ch8-Q14]

Bhoj Raj, a registered person, has availed GTA services on which he is liable to pay tax under reverse charge. He wishes to know whether he is required to issue an invoice. Please advise him discussing the relevant provisions under CGST Act and rules thereunder.

Answer

Bhoj Raj is required to issue an invoice with regard to the GTA services availed by him. A registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 (i.e. where the recipient is liable to discharge GST on reverse charge basis) shall issue an invoice in respect of goods or services or both received by him from the supplier on the date of receipt of goods or services or both.

31.14.3 Invoice by insurer, Banking Company, FI, NBFC

Question-1 [ICAI-I-Ch8-Q10] [ICAI-I-M18-11(b)-1.5]

A NBFC can issue a consolidated tax invoice at the end of every month for the supply made during that month. Examine the validity of the statement.

Answer

The said statement is valid in law. A customer may avail numerous services from a non-banking financial company in a given tax period. It may issue a consolidated tax invoice/ statement/ advice, any other document in lieu thereof, by whatever name called may be issued/ made available, physically/ electronically, for supply of services made during a month at the end of the month.

Quesiton-1A [ICSI-P-J19-2(a)(ii)-1]

A Non-banking financial company (NBFC) can issue a consolidated tax invoice at the end of every month for the supply made during that month. [T/F]

31.14.6 Invoice by RP supplying services by way of admission to exhibition of cinematograph films in multiplex screens

Question-1 [ICAI-I-Jan21-7a-4]

ABC Cinemas, a registered person engaged in making supply of services by way of admission to exhibition of cinematograph films in multiplex screens was issuing consolidated tax invoice for supplies at the close of each day in terms of section 31(3)(b) of CGST Act, 2017 read with fourth proviso to rule 46 of CGST Rules, 2017.

During the month of October, 2019, the Department raised objection for this practice and asked to issue separate tax invoices for each ticket. Advise ABC Cinemas for the procedure to be followed in the light of recent notification.

Answer

The procedure to be followed by ABC Cinemas, a registered person engaged in making supply of services by way of admission to exhibition of cinematograph films in multiplex screens, is as under:-

The option to issue consolidated tax invoice is not available to a supplier engaged in making supply of services by way of admission to exhibition of cinematograph films in multiplex screens. Thus, ABC Cinemas cannot issue consolidated tax invoice for supplies made by it at the close of each day. ABC Cinemas is required to issue an electronic ticket.

The said electronic ticket shall be deemed to be a tax invoice, even if such ticket does not contain the details of the recipient of service but contains the other information as prescribed to be mentioned.

31.15.1 Circumstances for issue of Delivery Challan in lieu of invoice

Question-1 [ICAI-I-Ch8-Q15]

Sitaram Textiles has to send cloth for dyeing to its job-worker. It wishes to know whether it needs to issue a tax invoice at the time of sending the goods to job-worker. Please advise him with reference to the provisions of the CGST Act.

Answer

Sitaram Textiles has to issue a delivery challan and not the tax invoice at the time of sending the goods to job-worker.

Rule 55(1) & (2)