GST Invoice, Bill of Supply, Debit Note, Credit Note & E-Invoicing – Complete Guide (Sections 31 to 34 of CGST Act, 2017)

Introduction

Invoices are among the most important documents under the Goods and Services Tax (GST) regime. They serve as proof of supply, help determine tax liability, and enable recipients to claim Input Tax Credit (ITC). Sections 31 to 34 of the CGST Act, 2017 deal with the issuance of invoices, bills of supply, debit notes, credit notes, and related provisions.

This article provides a complete overview of GST invoicing requirements, timelines, documentation, and the latest e-invoicing provisions.

Section 31 – Tax Invoice, Bill of Supply and Receipt Voucher
 

Who is Required to Issue a Tax Invoice?

The following persons are required to issue a Tax Invoice:

1. Registered Supplier under Regular Scheme - A registered supplier paying GST under the regular scheme must issue a Tax Invoice for taxable supplies.

2. Registered Recipient under Reverse Charge Mechanism (RCM) - Where GST is payable under Reverse Charge Mechanism, the recipient liable to pay GST must issue an invoice.

 

Who is Required to Issue a Bill of Supply?

A Bill of Supply is issued in the following cases:

1. Exempt Supplies - A registered person making exempt supplies must issue a Bill of Supply.

2. Composition Taxpayer - A registered person paying tax under the Composition Scheme must issue a Bill of Supply.

Small Value Supplies Below ₹200

Where:

• Supply is made to an unregistered person,
• Value of supply is less than ₹200, and
• Customer does not require an invoice,

the supplier is not required to issue an individual invoice or bill of supply.

Instead, a consolidated invoice or bill of supply may be prepared at the end of the day.

Receipt Voucher - Whenever a registered supplier receives an advance payment for any supply, a Receipt Voucher must be issued as evidence of receipt of such payment.

Signature Requirement - Computer-generated invoices, bills of supply, challans, and similar documents do not require a physical signature.

Time of Issuing Invoice

A. Supply of Goods

1. Where Supply Involves Removal of Goods

Invoice must be issued:

• Before or at the time of removal of goods.

2. Where Supply Does Not Involve Removal

Invoice must be issued:

• Before or at the time of delivery of goods.

 

Continuous Supply of Goods

• Payment Linked to Statement of Accounts - Invoice shall be issued on or before the date when the statement of account is issued.
• Payment on Account Basis - Invoice shall be issued on or before the date when payment is received.

 

Sale on Approval Basis

Invoice must be issued:

• On or before the date of acceptance, or
• Within six months from the date of removal,

whichever is earlier.

 

B. Supply of Services

Invoice may be issued:

• Before providing the service, or
• After providing the service within:
• 30 days (normal cases)
• 45 days (banking, insurance and financial institutions)

Continuous Supply of Services

• Due Date Ascertainable from Contract - Invoice must be issued on or before the due date of payment.
• Due Date Not Ascertainable - Invoice must be issued before or at the time payment is received.
• Payment Linked to Completion of Event - Invoice must be issued on or before completion of the event.
• Service Contract Terminated Before Completion - If services cease before completion under a contract, invoice must be issued for the portion of service already supplied up to the date of cessation.

 

Reverse Charge Mechanism (RCM)

Where the recipient is liable to pay GST under RCM, the invoice should be issued on the date of receipt of goods or services.

 

Invoice-Cum-Bill of Supply

A registered person supplying both:

• Taxable supplies, and
• Exempt supplies

to an unregistered customer may issue a single document known as an Invoice-Cum-Bill of Supply.

 

Manner of Issuing Invoice

Supply of Goods

Invoice shall be prepared in Triplicate:

1. Original – Buyer
2. Duplicate – Transporter
3. Triplicate – Supplier

Supply of Services

Invoice shall be prepared in Duplicate:

1. Original – Recipient
2. Duplicate – Supplier

 

Revised Invoice

A registered person may issue a Revised Invoice within one month from the date of issue of Registration Certificate.

This can be done for invoices issued during the period:

• From the effective date of registration, and
• Up to the date of issue of Registration Certificate.

This enables recipients to claim Input Tax Credit where eligible.

Section 32 – Who Can Collect GST?

 Only a registered person can collect GST.

Therefore:

• An unregistered person cannot collect GST from customers.
• A registered person must collect GST strictly as per the provisions of the GST law.

So, GST can only be collected by a registered person.

Key Provisions

• A person who is not registered under GST cannot collect GST from customers.
• A registered person must collect GST only in accordance with the provisions of the GST law.
• Unauthorized collection of tax is prohibited.

Section 33 – Tax Amount to be Shown Separately

Every taxable person making taxable supplies must clearly indicate the amount of GST in:

• Tax invoices,
• Assessment documents,
• Other related documents.

The tax component should form part of the price charged for the supply. 

Tax Invoice vs Bill of Supply

Who Must Issue a Tax Invoice?

The following persons are required to issue a Tax Invoice:

1. Registered Supplier under Regular Scheme - A registered taxpayer paying GST under the regular scheme must issue a Tax Invoice for taxable supplies.
2. Recipient Liable Under Reverse Charge Mechanism (RCM) - Where GST is payable under Reverse Charge, the registered recipient must issue an invoice.

 

Who Must Issue a Bill of Supply?

A Bill of Supply is issued by:

1. Suppliers Making Exempt Supplies

Registered persons supplying exempt goods or services must issue a Bill of Supply.

2. Composition Taxpayers

Persons registered under the Composition Scheme are required to issue a Bill of Supply instead of a Tax Invoice.

 

Small Value Transactions (Below ₹200)

Where:

• Supply is made to an unregistered person,
• Value is less than ₹200, and
• Customer does not require an invoice,

then the supplier is not required to issue an individual invoice.

Instead, a consolidated invoice or bill of supply may be prepared at the end of the day.

 

Receipt Voucher

Whenever a registered supplier receives an advance payment against a future supply, a Receipt Voucher must be issued as evidence of receipt.

Signature Requirement

Computer-generated documents such as:

• Tax Invoice
• Bill of Supply
• Delivery Challan

do not require a physical signature.

Section 34 – Debit Note and Credit Note

Debit Note

When Issued?

A Debit Note is issued when:

• Taxable value shown in invoice is less than actual value, or
• GST charged is less than the actual tax payable.

Effect

Supplier increases tax liability by declaring the debit note in GST returns.

 

Credit Note

When Issued?

A Credit Note may be issued when:

• Taxable value charged exceeds actual value,
• Excess GST has been charged,
• Goods are returned,
• Deficiency in supply exists.

Effect

Supplier can reduce tax liability by reporting the credit note.

However, it must be declared:

• On or before 30th November of the next financial year, or
• Date of filing annual return,

whichever is earlier.

 

Special Provisions for Certain Service Providers

Banking Companies, Financial Institutions, NBFCs and Insurers

Tax invoices issued by these entities may not contain:

• Serial Number
• Address of Recipient

Yet such invoices remain valid.

 

Goods Transport Agency (GTA)

The Consignment Note (Bilty) serves as the tax invoice.

It must contain:

• Gross weight,
• Name of consignor/consignee,
• Vehicle registration number,
• Origin and destination details,
• GSTIN details.

 

Passenger Transport Services

Ticket issued to passenger is treated as a Tax Invoice.

 

Cinema Halls

Cinema ticket itself is treated as a Tax Invoice.

 

E-Invoicing under GST

Applicability

E-invoicing is mandatory for registered persons whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds ₹5 Crore.

Applicable for:

• B2B Supplies
• Exports

Process of E-Invoicing

Step 1

Invoice is generated in ERP system in prescribed JSON format.

Step 2

Invoice details are uploaded to the Invoice Registration Portal (IRP).

Step 3

Portal validates data and generates:

• Invoice Reference Number (IRN)
• QR Code
• Digital Signature

Step 4

Data is automatically shared with:

• GST Portal
• E-Way Bill Portal

Step 5

Supplier receives digitally authenticated invoice with QR code.

 

Benefits of E-Invoicing

1. Reduction in fake invoices and fake ITC.
2. Automatic population of GST returns.
3. Faster generation of E-Way Bills.
4. Improved compliance.
5. Better tax administration.
6. Paperless business operations.
7. Reduced manual errors.

 

Exemptions from E-Invoicing

The following entities are exempt:

• SEZ Units
• Insurance Companies
• Banks
• Financial Institutions
• NBFCs
• Goods Transport Agencies
• Passenger Transport Services
• Cinema Halls
• OIDAR Service Providers
• Government Departments
• Local Authorities

The exemption applies to the entity as a whole and not merely to specific supplies.

Physical Copy of E-Invoice Not Mandatory

During transportation of goods:

• Carrying a physical invoice is not compulsory.
• QR Code containing the IRN can be produced electronically for verification.

Dynamic QR Code for B2C Transactions

Applicability

A registered person whose turnover exceeds ₹500 Crore must include a Dynamic QR Code on B2C invoices.

The QR Code enables customers to make digital payments directly.

 

Digital Display Option

Where QR Code is displayed digitally and the invoice contains payment cross-reference details, the invoice will be deemed compliant with Dynamic QR Code requirements.

 

Conclusion

Sections 31 to 34 of the CGST Act form the backbone of GST documentation and compliance. Proper issuance of invoices, bills of supply, debit notes, credit notes, and adherence to e-invoicing requirements are essential for smooth business operations, seamless ITC flow, and avoidance of penalties. With increasing digitization through e-invoicing and QR-code-based systems, GST compliance is becoming more transparent, efficient, and technology-driven.