Recheck!! Are you correctly making Tax Invoice / Bill?

Recently it was observed by Government that some registered persons especially service providers making interstate supply to unregistered persons, Composition dealers UIN etc are not mentioning Place of Supply in the Tax Invoice. To clarify and highlight the importance of mentioning Place of supply in such cases, Circular No. 89/08/2019-GST and Circular No. 90/09/2019-GST dated 18th February 2019 was issued by CBIC. Circular clearly states the fundamental Principal of GST “destination-based Consumption tax” therefore registered person must ensure that tax accrues to the state where consumption of goods or services or both takes place. To avoid severe consequences and hassles, revisit section 31 of CGST Act 2017 and related Rule 46 of CGST Rules 2017 and check whether you are issuing Tax invoice as required in the Act.

Alert! Registered persons making supply of goods or services or both in the course of inter-State trade or commerce shall specify the place of supply along with the name of the State in the tax invoice. To determine place of Supply of goods or services refer section 10 and Section 12 respectively of IGST Act 2017

Reporting in GSTR 1 and GSTR 3B for interstate supply to Unregistered Person
A registered supplier is required to mention the details of inter-State supplies made to unregistered persons, composition taxable persons and UIN holders in Table 3.2 of FORM GSTR-3B. Further, the details of all inter-State supplies made to unregistered persons where the invoice value is up to Rs 2.5 lakhs (rate-wise) are required to be reported in Table 7B of FORM GSTR-1.

Reporting                                                        GSTR 1                            GSTR 3B
Inter State supplies to unreg. person        Table 7B                        Table 3.2

Consequences for making incorrect Invoice
Contravention under such cases attracts penalty under section 122 or 125 of CGST Act/SGST Act
Contributed by CS Payal Kataria
Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.
Readers are advised to consult the professional for understanding applicability of this writeup in the respective scenarios. While due care has been taken in preparing this writeup, the existence of mistakes and omissions herein is not ruled out. No part of this writeup should be distributed or copied (except for personal, non-commercial use) without our written permission.

Leave a Reply

Your email address will not be published.