Section 31 of the CGST Act governs the issuance of tax invoices, which are the primary documents for recording taxable supplies and enabling Input Tax Credit (ITC) claims by recipients. Every registered person making a taxable supply must issue a tax invoice containing prescribed particulars within the specified timeline. Non-compliance with invoice requirements can result in ITC denial for the recipient, penalties for the supplier, and complications during GST audit.
When Must a Tax Invoice Be Issued?
The timeline for issuing a tax invoice depends on whether the supply involves goods or services.
Invoice Timelines by Supply Type
| Supply Type | Timeline | Example |
| Goods (with physical movement) | Before or at the time of removal/delivery | Wholesaler ships 500 kg of wheat; invoice accompanies the shipment |
| Goods (without movement) | At the time goods are made available to the recipient | Warehouse transfer within the same premises |
| Services (general) | Within 30 days from the date of completing the service | Photographer delivers album; 30 days to issue invoice |
| Services (banking/financial) | Within 45 days from the date of supply | Bank charges processed for the quarter |
| Continuous supply of goods | At the time of each payment or statement date, as per the contract | Weekly raw material delivery; bi-weekly invoicing per contract |
| Continuous supply of services | On or before the date of payment or completion of each event | Monthly IT support contract; invoice at the end of each month |
| Advance payment received | Receipt voucher at the time of advance; tax invoice upon supply completion | Advance received; receipt voucher issued immediately |
If the invoice is not issued within the prescribed time, the date of provision of service or removal of goods is deemed to be the time of supply, and GST becomes payable from that date, regardless of when the invoice is actually issued.
Mandatory Components of a Tax Invoice
Every GST-compliant tax invoice must contain the following 16 fields as prescribed under Rule 46 of the CGST Rules.
| # | Component | Requirement |
| 1 | Supplier’s name, address, and GSTIN | Mandatory |
| 2 | Consecutive serial number (unique per FY, max 16 characters) | Mandatory |
| 3 | Date of issue | Mandatory |
| 4 | Recipient’s name, address, and GSTIN (if registered) | Mandatory for B2B; name and address for B2C above Rs. 50,000 |
| 5 | HSN code of goods or SAC code of services | Mandatory (4-digit for turnover above Rs. 5 crore; 6-digit above Rs. 5 crore per Phase III) |
| 6 | Description of goods or services | Mandatory |
| 7 | Quantity and unit | Mandatory for goods |
| 8 | Total value of supply | Mandatory |
| 9 | Taxable value (after discount) | Mandatory |
| 10 | GST rate (CGST, SGST/UTGST, or IGST) | Mandatory |
| 11 | Amount of tax charged (CGST, SGST, IGST, cess separately) | Mandatory |
| 12 | Place of supply (for inter-state supplies) | Mandatory |
| 13 | Delivery address (if different from place of supply) | Where applicable |
| 14 | Whether tax is payable on a reverse charge | Mandatory (Yes/No) |
| 15 | Signature or digital signature of the supplier | Mandatory |
| 16 | QR code (for B2C invoices by notified taxpayers) | Where applicable |
For e-invoicing, applicable businesses (turnover above Rs. 5 crore) must also include the Invoice Reference Number (IRN) and the QR code generated by the Invoice Registration Portal (IRP).
Types of Invoices Under GST
| Invoice Type | When Issued | Who Issues | ITC Available to Recipient |
| Tax invoice | Taxable supply of goods or services | Registered supplier | Yes |
| Bill of supply | Exempt supply or supply by a composition dealer | Registered supplier (exempt/composition) | No |
| Receipt voucher | Advance payment received before the supply | Registered supplier | No (ITC available only on tax invoice) |
| Refund voucher | Supply does not take place after advance received | Registered supplier | Not applicable |
| Debit note | Value of supply increases after the original invoice | Registered supplier | Yes (additional ITC) |
| Credit note | Value of supply decreases after the original invoice | Registered supplier | The recipient must reverse proportionate ITC |
| Delivery challan | Goods sent for job work, approval, or exhibition | Registered supplier | Not applicable (no supply) |
Exemptions from Tax Invoice Requirement
Certain supplies are exempt from the mandatory tax invoice requirement under Section 31(3):
• Supplies of goods valued below Rs. 200, where the recipient does not require an invoice and the supplier can issue a consolidated invoice at the end of the day
• Supplies by composition dealers who issue a bill of supply instead
• Exempt supplies that require only a bill of supply
• Supplies covered by a continuous supply contract where the contract terms determine the invoicing schedule
Impact on Input Tax Credit
The tax invoice is the primary document for ITC claims. Under Section 16 of the CGST Act, ITC can be claimed only when the recipient possesses a valid tax invoice or debit note. An incomplete or incorrect invoice may result in ITC denial during assessment.
Common invoice errors that lead to ITC issues include missing or incorrect GSTIN for the recipient, incorrect HSN/SAC code affecting rate classification, missing place of supply (affecting CGST/SGST vs IGST determination), invoices issued after the prescribed timeline, and serial numbers not following a consecutive pattern.
Recipients should verify every invoice received against the prescribed format before recording it in their purchase register and claiming ITC.
E-Invoicing Under Section 31
For businesses with aggregate turnover above Rs.5 crore, every B2B tax invoice must be registered on the Invoice Registration Portal (IRP). The IRP validates the invoice data, assigns a unique IRN, and digitally signs the invoice with a QR code. The e-invoice data auto-populates into GSTR-1 and the e-way bill system.
An invoice without a valid IRN is treated as invalid for GST purposes. The recipient cannot claim ITC on such invoices, and the supplier faces penalties for non-compliance with e-invoicing requirements.
Key Terms
• Section 31 CGST Act: The statutory provision governing tax invoice issuance requirements, timelines, and mandatory contents for all taxable supplies under GST
• Tax Invoice: The primary document issued by a registered supplier for taxable supplies, containing 16 mandatory fields and enabling ITC claims by the recipient
• Bill of Supply: An alternative document issued by composition dealers or for exempt supplies, which does not charge GST and does not enable ITC claims
• Receipt Voucher: A document issued under Section 31(3)(d) when advance payment is received before the supply takes place
• Invoice Reference Number (IRN): The unique number assigned by the IRP to each e-invoice, digitally signed and embedded with a QR code for verification
Ensuring Invoice Compliance Under GST?
Issue GST-compliant invoices with all mandatory components to protect your business and your buyers’ ITC claims. Use WFYI tools for invoice management and compliance verification.
| Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional for advice specific to your situation. |
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Frequently Asked Questions
Q1: What happens if a tax invoice is not issued within the prescribed timeline?
The date of supply is deemed to be the time of supply, and GST becomes payable from that date. The supplier may face penalties, and the recipient’s ITC claim may be delayed or denied.
Q2: Is the HSN code mandatory on every tax invoice?
Yes. From Phase III (January 2025), HSN codes must be selected from a dropdown menu. The number of digits required depends on the supplier’s turnover: 4 digits for turnover up to Rs. 5 crore, 6 digits for turnover above Rs. 5 crore.
Q3: Can ITC be claimed on a bill of supply?
No. A bill of supply is issued for exempt supplies or by composition dealers and does not charge GST. Since no tax is charged, no ITC is available to the recipient.
Q4: What is the difference between a tax invoice and an e-invoice?
A tax invoice is the document itself. An e-invoice is a tax invoice that has been registered on the IRP and assigned an IRN with a QR code. E-invoicing is mandatory for businesses with a turnover of over Rs. 5 crore.
Q5: Must the recipient’s GSTIN be on every invoice?
For B2B supplies, the recipient’s GSTIN is mandatory. For B2C supplies above Rs. 50,000, the recipient’s name and address are required. For B2C below Rs. 50,000, these details are optional.
