Section 31 of the Central Goods and Services Tax Act, 2017 deals with the tax invoice issued by a registered person for taxable supplies of goods or services. It specifies when a tax invoice is required to be issued and contains separate provisions for goods, services, continuous supplies, advances, reverse charge transactions and certain special situations.
A tax invoice is an important GST document because it records the taxable supply, value of the supply and tax charged by the supplier. It also forms one of the principal documents used by a recipient for claiming eligible input tax credit, subject to the conditions prescribed under the GST law. CBIC’s input tax credit rules specifically recognise an invoice issued under Section 31 as one of the documents on the basis of which ITC may be availed.
Section 31 should be read together with the relevant provisions of the CGST Rules, particularly Rules 46 to 55, which prescribe the particulars, time limits, manner and special forms of invoices and related documents.
What is Section 31 of the CGST Act?
Section 31 is titled “Tax invoice.”
The section establishes the basic requirement for issuing tax invoices by registered persons making taxable supplies.
The timing of the invoice depends on whether the supply involves:
- goods;
- services;
- continuous supply of goods;
- continuous supply of services;
- receipt of advance;
- reverse charge;
- supplies made by an Input Service Distributor or other specified suppliers; or
- another situation for which the GST Rules prescribe a special document.
The invoice must contain the prescribed particulars and must be issued within the applicable time prescribed under the Act and Rules.
Who Is Required to Issue a Tax Invoice?
The basic obligation under Section 31 applies to a registered person making taxable supplies.
A registered person supplying taxable goods is required to issue a tax invoice in accordance with Section 31(1).
Similarly, a registered person supplying taxable services is required to issue a tax invoice under Section 31(2).
This means that an ordinary unregistered person cannot issue a GST tax invoice merely because the person is selling goods or providing services. CBIC’s GST FAQ also clarifies that only registered persons are required to issue tax invoices under Section 31 read with the relevant rules, while an unregistered person cannot issue a tax invoice.
Tax Invoice for Supply of Goods
Section 31(1) deals with taxable supplies of goods.
A registered person supplying taxable goods must issue a tax invoice:
- before or at the time of removal of goods, where the supply involves movement of goods; or
- before or at the time of delivery of goods or making the goods available to the recipient, where the supply does not involve movement of goods.
The invoice must contain the description, quantity and value of goods, tax charged and other prescribed particulars.
Where Goods Involve Movement
Suppose a manufacturer sells machinery to a customer and the machinery is transported from the manufacturer’s premises to the customer’s premises.
Since the supply involves movement of goods, the tax invoice must be issued before or at the time the goods are removed for supply to the recipient.
Where Goods Do Not Involve Movement
Where the supply does not involve movement of goods, the invoice must be issued before or at the time of delivery of the goods or when the goods are made available to the recipient.
Therefore, the exact timing requirement depends on the nature of the supply.
Tax Invoice for Supply of Services
Section 31(2) deals with taxable services.
A registered person supplying taxable services is required to issue a tax invoice before or after the provision of the service but within the prescribed period.
The invoice must show the description and value of the service, tax charged and other prescribed particulars.
The detailed time limit is prescribed under Rule 47 of the CGST Rules.
For most taxable services, the invoice is required to be issued within 30 days from the date of supply of service.
For an insurer, banking company, financial institution, including a non-banking financial company, the prescribed period is generally 45 days.
Rule 47 also contains a special provision for certain taxable supplies of services between distinct persons by specified suppliers, including insurers, banking companies, financial institutions, NBFCs and telecom operators, allowing the invoice to be issued within the specified alternative time framework.
Time Limit for Issuing Tax Invoice for Services
The time limit for a service invoice is important because Section 31 provides the basic obligation while the Rules determine the detailed period.
General Rule
For taxable services, the invoice is generally required to be issued within:
30 days from the date of supply of service.
Special Rule for Certain Financial Service Providers
For:
- insurers;
- banking companies;
- financial institutions; and
- non-banking financial companies,
the prescribed period is generally:
45 days from the date of supply of service.
Rule 47 also contains a special provision for certain supplies between distinct persons by specified service providers.
What Is a Tax Invoice?
A tax invoice is a GST document issued by a registered person for a taxable supply.
It records information such as:
- supplier details;
- recipient details;
- invoice number;
- invoice date;
- description of goods or services;
- quantity, where applicable;
- taxable value;
- applicable GST rate;
- GST amount;
- place of supply in applicable cases; and
- other prescribed information.
The detailed list of particulars is provided under Rule 46.
Mandatory Particulars of a GST Tax Invoice
Rule 46 prescribes the particulars that a tax invoice should contain.
1. Supplier Name, Address and GSTIN
The invoice should contain the:
- name of the supplier;
- address of the supplier; and
- GSTIN of the supplier.
These details identify the registered supplier making the taxable supply.
2. Consecutive Invoice Number
The invoice must contain a consecutive serial number.
The numbering may use:
- alphabets;
- numerals;
- special characters;
- hyphen or dash; and
- slash.
The invoice number or series must be unique for the financial year.
A business can maintain more than one invoice series where permitted, but each series must follow the prescribed requirements.
3. Date of Issue
The date on which the tax invoice is issued must be mentioned.
The invoice date is particularly important because invoice timing can affect GST reporting and other compliance matters.
4. Recipient Details
Where the recipient is registered, the tax invoice contains the recipient’s:
- name;
- address; and
- GSTIN or UIN, where applicable.
Where the recipient is unregistered, the Rules prescribe additional recipient and delivery details in specified circumstances.
5. HSN Code or Accounting Code
The invoice must contain the applicable HSN code for goods or the Accounting Code for services, subject to the notifications and exemptions applicable to the relevant class of taxpayers.
The number of digits required can depend on the applicable GST provisions and notifications.
6. Description of Goods or Services
The invoice must provide a description of the goods or services supplied.
The description should allow the nature of the taxable supply to be identified.
7. Quantity and Unit
For goods, the invoice should mention:
- quantity; and
- unit or Unique Quantity Code, where applicable.
For services, quantity is generally not applicable in the same manner as goods.
8. Total Value of Supply
The invoice should show the total value of the goods or services or both.
9. Taxable Value
The invoice must show the taxable value after taking into account applicable discounts or abatements.
10. GST Rate
The applicable tax rate must be mentioned.
Depending on the nature and location of supply, this may include:
- Central Tax;
- State Tax;
- Integrated Tax;
- Union Territory Tax; or
- cess.
11. Amount of GST
The actual amount of tax charged must also be mentioned separately as applicable.
12. Place of Supply
For an inter-State supply, the invoice must contain the place of supply along with the name of the State.
13. Address of Delivery
Where the delivery address is different from the place of supply, the applicable delivery address must be mentioned.
14. Reverse Charge Indicator
The invoice must indicate whether the tax is payable on a reverse charge basis.
15. Signature or Digital Signature
The invoice must contain the signature or digital signature of the supplier or authorised representative, subject to the applicable electronic-invoicing and documentation provisions.
Rule 46 prescribes the detailed particulars of a tax invoice.
Tax Invoice for Unregistered Recipients
GST rules also provide specific requirements where the recipient is not registered.
Where the recipient is unregistered and the taxable value of the supply is ₹50,000 or more, the invoice must contain the prescribed:
- name and address of the recipient;
- address of delivery; and
- name of the State and its code.
The Rules also provide for recording these details where the value is below ₹50,000 if the unregistered recipient requests that the information be included.
Therefore, businesses should not assume that the recipient’s GSTIN is the only information relevant to invoice preparation.
When Is a Tax Invoice Not Required?
Section 31(3) contains several situations where documents other than an ordinary tax invoice may be issued.
The Government can also notify categories of goods or supplies for which invoices may be issued within a specified time or in a specified manner.
For certain services, another document may be treated as a tax invoice or a tax invoice may not be required subject to prescribed conditions.
This is why taxpayers should not apply the same invoice procedure to every type of transaction.
Bill of Supply
A bill of supply is different from a tax invoice.
Under Section 31(3)(c), a registered person supplying certain goods or services for which tax cannot be collected in the ordinary manner is required to issue a bill of supply instead of a tax invoice, subject to the applicable GST provisions.
The detailed particulars of a bill of supply are prescribed under the GST Rules.
A bill of supply does not function in exactly the same way as a tax invoice because it does not show GST charged in the manner applicable to a taxable tax invoice.
Receipt Voucher for Advance Payment
Section 31(3)(d) deals with advances.
Where a registered person receives an advance payment with respect to a supply, the person is required to issue a receipt voucher evidencing receipt of the payment, subject to the applicable provisions.
Rule 50 prescribes the particulars of a receipt voucher, including:
- supplier name, address and GSTIN;
- consecutive serial number;
- date;
- recipient details;
- description of goods or services;
- amount of advance;
- tax rate;
- tax amount;
- place of supply for applicable inter-State supplies;
- reverse charge indication; and
- signature or digital signature.
What Happens When Advance Is Received but Supply Is Not Made?
GST rules provide for a refund voucher in certain circumstances.
Where a registered person receives an advance, issues a receipt voucher and subsequently no supply is made and no tax invoice is issued in pursuance of that receipt voucher, the registered person may issue a refund voucher against the payment, as provided under the GST framework.
This mechanism is useful when an advance has been received but the underlying taxable supply does not ultimately take place.
Self-Invoice Under Reverse Charge
Section 31(3)(f) deals with situations where a registered person is liable to pay GST under the applicable reverse charge provisions in respect of supplies received from an unregistered supplier.
In such circumstances, the registered recipient is required to issue an invoice in respect of the goods or services received from the unregistered supplier, subject to the applicable reverse charge provisions.
CBIC’s FAQ explains this self-invoicing requirement for supplies covered by the reverse-charge provisions and distinguishes it from imports of goods, where the bill of entry serves as the relevant document rather than a self-invoice.
The application of reverse charge itself depends on the specific provision and notification applicable to the transaction.
Payment Voucher Under Reverse Charge
Section 31(3)(g) also requires a registered person liable to pay tax under the applicable reverse charge provisions to issue a payment voucher at the time of making payment to the supplier.
CBIC’s FAQ specifically recognises this requirement in relation to payment made to a foreign supplier in circumstances covered by the reverse charge provisions.
A payment voucher should therefore not be confused with:
- a tax invoice;
- a receipt voucher; or
- a self-invoice.
Each document serves a different purpose under GST law.
Continuous Supply of Goods
Section 31 contains special provisions for continuous supply of goods.
Where successive statements of accounts or successive payments are involved, the tax invoice must be issued:
- before or at the time each statement is issued; or
- before or at the time each payment is received,
as applicable under the statutory provision.
The purpose is to ensure that invoicing keeps pace with recurring statements or payments instead of waiting until the entire continuous supply arrangement ends.
Continuous Supply of Services
Section 31 also contains specific rules for continuous supply of services.
The timing of the invoice depends on whether:
- the due date of payment is ascertainable from the contract;
- the due date of payment is not ascertainable;
- payment is linked to completion of an event; or
- payment is received before the service is completed.
The invoice must be issued within the time prescribed by the relevant provision according to the circumstances of the continuous supply.
This provision is particularly relevant for recurring services provided under contracts involving periodic payments or statements.
Tax Invoice for Exports
Exports of goods or services have specific invoice requirements.
Rule 46 requires an export invoice to carry the applicable endorsement, such as:
“SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST”
or
“SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”
as applicable.
For exports, the invoice also contains prescribed information relating to the recipient, delivery address, destination country and relevant export documentation.
Therefore, an export invoice is not simply an ordinary domestic invoice with a different customer address.
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Tax Invoice for Special Categories of Suppliers
GST Rules prescribe special invoicing arrangements for certain suppliers.
Insurance Companies
An insurer may issue a tax invoice or another document in lieu of a tax invoice in the manner permitted under the Rules.
Banking Companies and Financial Institutions
Banking companies, financial institutions and NBFCs have specific invoice-related provisions under Rule 54.
Goods Transport Agencies
A GTA supplying transportation services by road in a goods carriage has additional document requirements, including information relating to:
- gross weight of the consignment;
- consignor;
- consignee;
- vehicle registration number;
- goods transported;
- origin and destination; and
- GSTIN of the person liable to pay tax.
Rule 54 provides these special requirements.
Passenger Transportation Services
For passenger transportation services, the ticket may be treated as a tax invoice where the prescribed conditions are satisfied.
Electronic Invoicing and Section 31
Section 31 establishes the legal requirement for tax invoices, while the electronic-invoicing framework determines how invoices must be reported and authenticated for taxpayers covered by the applicable provisions.
Businesses covered by e-invoicing requirements need to comply with the applicable rules and notifications relating to:
- Invoice Reference Number;
- Invoice Registration Portal;
- QR code;
- invoice reporting; and
- other prescribed requirements.
The existence of an ordinary invoice requirement under Section 31 does not by itself determine whether a particular taxpayer is covered by mandatory e-invoicing. That depends on the applicable notification, turnover threshold and other conditions in force for the relevant period.
Can a Tax Invoice Be Issued Electronically?
Yes.
GST law permits electronic documentation subject to the applicable rules.
CBIC’s FAQ explains that for digitally signed documents, the traditional requirement of maintaining separate original and duplicate copies does not operate in the same way as for physical documents. A digitally signed invoice can be retained by the supplier and made available to the recipient.
Businesses using electronic invoicing should nevertheless ensure that the invoice complies with all applicable GST requirements.
Copies of Tax Invoice for Goods and Services
The GST Rules prescribe the manner of issuing copies of invoices.
For supply of goods, Rule 48 provides for the prescribed copies for the recipient, transporter and supplier in the physical-document framework.
For supply of services, the prescribed copies are for the recipient and supplier.
However, electronic and digitally signed invoices operate under the applicable electronic documentation framework, so taxpayers should follow the requirements relevant to the method of invoicing used.
Consolidated Tax Invoice for Certain Supplies to Unregistered Persons
GST Rules provide an important relaxation for certain supplies to unregistered recipients.
A registered person may not issue an individual tax invoice in accordance with the specified provision where:
- the recipient is not a registered person; and
- the recipient does not require the invoice.
In such cases, the supplier may issue a consolidated tax invoice at the close of each day for the relevant supplies, subject to the conditions of the Rules.
This provision can be particularly relevant to businesses making numerous small-value supplies to consumers.
Tax Invoice and Input Tax Credit
A tax invoice is particularly important for the recipient because it can serve as the documentary basis for claiming eligible input tax credit.
The ITC rules recognise an invoice issued by the supplier in accordance with Section 31 as a document for availing input tax credit. However, possession of an invoice alone does not automatically guarantee ITC.
The recipient must satisfy the other conditions applicable to input tax credit under Section 16 and the relevant rules.
Therefore, taxpayers should distinguish between:
having a tax invoice and being eligible to claim ITC.
Both are related, but they are not the same requirement.
What Information Should Be Checked Before Issuing a GST Invoice?
A business should verify the following before issuing an invoice:
Supplier Information
Check:
- legal name;
- registered address;
- GSTIN; and
- relevant registration details.
Recipient Information
Check:
- customer name;
- GSTIN, where registered;
- address;
- place of delivery; and
- State and State code where required.
Supply Details
Verify:
- description;
- HSN or Accounting Code;
- quantity;
- unit;
- taxable value;
- discount;
- GST rate; and
- tax amount.
Place of Supply
For inter-State supplies, the correct place of supply and State should be recorded.
Reverse Charge
Check whether the supply is subject to reverse charge and make the required indication.
Invoice Number
Ensure that the invoice number is unique and follows the applicable series requirements.
Date
Verify that the invoice is being issued within the statutory time limit.
Difference Between Tax Invoice and Bill of Supply
| Basis | Tax Invoice | Bill of Supply |
|---|---|---|
| Main purpose | Used for taxable supply where GST is charged | Used in specified cases where tax invoice is not required |
| GST amount | GST is shown as applicable | GST is not charged as a tax invoice |
| Common use | Taxable supplies by registered persons | Exempt supplies and specified composition-related supplies |
| ITC relevance | Can support eligible recipient ITC subject to Section 16 | Generally does not show GST charged for ITC |
| Main provision | Section 31 | Section 31(3)(c) and Rule 49 |
The exact requirement depends on the nature of the supply and the taxpayer’s GST status.
Difference Between Tax Invoice and Receipt Voucher
A tax invoice records a taxable supply.
A receipt voucher, on the other hand, is issued when a registered person receives an advance payment in respect of a supply, subject to the applicable GST provisions.
The two documents should not be treated as interchangeable.
A receipt voucher records the receipt of the advance, while the tax invoice relates to the taxable supply itself. Rule 50 prescribes the particulars required in a receipt voucher.
Difference Between Tax Invoice and Payment Voucher
A payment voucher is associated with specified reverse charge situations.
A tax invoice is ordinarily issued by the supplier for a taxable supply.
A payment voucher is issued by the person liable to pay tax under the applicable reverse charge provision at the time of making payment to the supplier.
Therefore, the purpose and issuing person can be different.
Consequences of Incorrect Tax Invoicing
Correct invoicing is important because the invoice is directly connected with:
- GST liability;
- reporting of outward supplies;
- recipient’s input tax credit;
- accounting records;
- tax reconciliation; and
- audit and departmental verification.
An invoice containing incorrect GSTIN, tax rate, place of supply, taxable value or tax amount can create reconciliation problems for both the supplier and recipient.
Where an invoice requires correction or adjustment, the supplier may need to use the applicable provisions relating to credit notes, debit notes or revised invoices, depending on the circumstances.
Record Keeping of Tax Invoices
Registered persons are required to maintain appropriate records of tax invoices issued and received.
CBIC’s accounting and record rules require registered persons, subject to the applicable provisions, to maintain records including a register of tax invoices, credit notes, debit notes and delivery challans issued or received during tax periods.
Therefore, invoice compliance does not end when the invoice is generated.
The business should also retain and reconcile the relevant records.
Practical Example of Section 31
Suppose ABC Traders sells taxable electronic goods worth ₹1,00,000 to XYZ Ltd.
ABC Traders is a registered person and the supply involves movement of goods.
ABC Traders must issue the tax invoice before or at the time the goods are removed for supply.
The invoice should contain the applicable:
- invoice number;
- invoice date;
- supplier GSTIN;
- recipient GSTIN;
- description of goods;
- HSN;
- quantity;
- taxable value;
- GST rate;
- GST amount;
- place of supply, where applicable;
- reverse-charge indication, where applicable; and
- other prescribed particulars.
The recipient can use the invoice as one of the documentary requirements for claiming eligible input tax credit, provided the other conditions under the GST law are satisfied.
Practical Example for a Service Provider
Suppose ABC Digital Services provides taxable marketing services to a registered company.
The service provider should issue the tax invoice within the applicable time prescribed for services.
For a general service provider, Rule 47 provides a period of 30 days from the date of supply of service.
If the supplier falls within a category for which the Rules provide a 45-day period, the applicable special time limit must be followed.
The invoice should contain the prescribed service description, value, tax rate, tax amount and other applicable particulars.
Practical Example of Advance Payment
Suppose a registered service provider receives ₹50,000 as an advance for a taxable service.
Where the GST provisions require a receipt voucher for the advance, the supplier issues a receipt voucher containing the prescribed details.
When the taxable supply takes place, the appropriate tax invoice is issued according to the applicable invoicing provisions.
If the supply is subsequently not made and the prescribed conditions are satisfied, a refund voucher may be issued against the advance.
Key Points to Remember About Section 31
The most important points relating to Section 31 are:
- Section 31 deals with tax invoices under GST.
- A registered person supplying taxable goods is generally required to issue a tax invoice.
- For goods involving movement, the invoice is issued before or at the time of removal.
- For goods not involving movement, the invoice is issued before or at the time of delivery or making the goods available.
- A registered person supplying taxable services must issue a tax invoice within the prescribed period.
- The general service-invoice period under Rule 47 is 30 days from the date of supply of service.
- Certain specified service providers have a 45-day period.
- Continuous supply of goods has special invoice-timing provisions.
- Continuous supply of services also has special invoice-timing provisions.
- A receipt voucher is used for applicable advances received.
- A bill of supply is used in specified situations instead of a tax invoice.
- A registered person liable under specified reverse-charge provisions may have to issue a self-invoice.
- A payment voucher is required in specified reverse-charge situations when payment is made to the supplier.
- Rule 46 prescribes the main particulars of a tax invoice.
- Invoice numbering must follow the prescribed serial-number requirements.
- HSN or Accounting Code requirements apply according to the relevant GST provisions and notifications.
- Inter-State invoices require the applicable place-of-supply details.
- Export invoices require prescribed export endorsements and details.
- Certain sectors such as insurance, banking, GTA and passenger transportation have special invoicing provisions.
- A tax invoice is one of the documents recognised for claiming eligible input tax credit.
- Possession of an invoice alone does not automatically establish eligibility for ITC.
- Taxpayers should maintain proper records of invoices issued and received.
Conclusion
Section 31 of the CGST Act, 2017 provides the basic legal framework for issuing tax invoices under GST. It establishes when registered persons supplying taxable goods or services are required to issue invoices and provides separate rules for different types of supplies and transactions.
For goods, the timing of the invoice depends on whether the supply involves movement of goods. Where movement is involved, the invoice is generally required before or at the time of removal. Where there is no movement, it is issued before or at the time of delivery or making the goods available to the recipient. For services, the invoice must be issued within the period prescribed under the Rules, which is generally 30 days and 45 days for specified categories of service providers.
Section 31 also covers several important documents and situations, including bill of supply, receipt voucher, self-invoice under specified reverse charge situations, payment voucher, continuous supplies and special categories of suppliers. The detailed requirements are provided through the CGST Rules.
A correctly prepared GST invoice is also important for the recipient because an invoice issued in accordance with Section 31 is one of the documents recognised for claiming eligible input tax credit. However, the recipient must satisfy all other applicable ITC conditions as well.
For businesses, compliance with Section 31 therefore involves more than simply creating a bill. The supplier should ensure that the invoice is issued within the prescribed time, contains the required particulars, reflects the correct tax treatment and is properly recorded and retained.
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Frequently Asked Questions About Section 31 of the CGST Act
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