Even as the Goods and Services Tax (GST) rolled out from July 1, consumers will be liable to pay GST on bill payment for credit card, telephone or any other service consumed in June if the invoice for the same has been generated or payment made in July. “Supposing your billing cycle ended on June 25, invoice was generated on July 10 and payment was not made in advance…so when you issue invoice the liability is of GST because under law the date of providing of service is the date of issue of invoice,” Upender Gupta, Commissioner (GST), CBEC, said.
Under GST, the modal rate for services is 18 per cent as against 15 per cent service tax earlier, though input tax credit is being provided on goods being used for supply of services. Under existing rules, service tax is levied on the date of issue of invoice or date of making of payment, whichever is earlier. Invoice for services has to be generated within 30 days of providing the service. In case a consumer pays the bill in advance, then as per the rule, the tax liability arises on that day.
For goods, the law states that the day an invoice is issued will be considered as the date of goods sold and tax would be charged. Also, to help businesses find the Harmonized System Nomenclature (HSN) code applicable for various commodities under the GST regime, the CBEC has launched a search option on its website by which they can find out the code by just typing the name of the product.
“To make it easy for businesses, the CBEC has launched on its website a search option wherein businesses can just type the product they are searching for and get the HSN code,” revenue secretary Hasmukh Adhia said at his second GST Masterclass. Businesses with turnover of up to Rs 1.5 crore need not quote HSN code in the invoices GST, but those above the limit will have to do so.
Adhia said there is no prescribed format that businesses have to follow while raising an invoice in the GST regime. However, details like GSTIN of the trader and the amount of the bill would have to be clearly specified.
In a relief to traders, Adhia said, there is no compulsion on issuing a digitised bill, as a manual invoice will also hold good. Adhia said that issuing an invoice is not necessary if the transaction is below Rs 200.
However, the trader needs to furnish an invoice in case the consumer insists on it or the transaction is B2B (Business to Business). Further, if a business does not have GSTIN or provisional id, then it can transact business using the ‘bill of supply’.