A registered person must issue tax invoices under GST to its recipient for supplying goods or services or both in India. Time period for issuance of invoice is different for goods and services. For goods, tax invoice should be issued any time before or at its delivery. For services, it should be issued within 30 days from the date of supply of services. Let us discuss time limit for issue of tax invoices under GST in detail.
To discuss time limit for issue of tax invoices in case of goods, we can divide supply to following two categories;
- When supply involves movement of goods, tax invoice should be issued at the time of removal.
- When supply does not involve movement of goods, tax invoice should be issued at the time of delivery.
Goods can be sent on approval basis within the state or outside the state. Where goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the time of supply or 6 months from the date of removal, whichever is earlier.
As per rule 47 of CGST and SGST rules 2017, in case of supply of services, tax invoice is to be issued within 30 days from the date of supply of services. In case of a banking company, insurer, financial institution including a non banking financial company (NBFC), the time limit is 45 days instead of 30 days.
An insurer or a banking company or a financial institution, including NBFC, or a telecom operator, or any other class of supplier of services as may be notified by the Government, making taxable supplies of services between distinct persons as specified in section 25 may issue the invoice before or at the time such supplier records the same in his books of accounts or before the expiry of the quarter during which the supply was made.
Time limit to issue tax invoice under GST in case of continuous supply
If under a contract, goods agreed to be provided continuously or on recurrent basis for which the supplier invoice the recipient on a regular or periodic basis, the invoice shall be issued before or at the time each such statement is issued or as the case may be, each such statement is received.
In case of continuous supply of goods, where successive statement of accounts or successive payments are involved, the tax invoice shall be issued before or at the time of each such statement is issued or as the case may be, each such payment is received.
However, in the case of continuous supply of services, provisions of issue of tax invoice is based on the due date as specified in the contract.
If the due date of payment is ascertainable from the contract, the tax invoice shall be issued on or before such due date of payment as specified in the contract.
If the due date of payment is not ascertainable from the contract, you can issue invoice before or at the time when the supplier of services receives payment.
If in the contract its specifically mentioned that the payment will be linked to completion of an event or achieving milestones, the tax invoice should be issued on or before the date of completion of that particular event or milestone.
If supply of services ceases before the completion of supply under a contract, then the tax invoice should be issued to the extent of supply effected before such cessation. In such case, invoice should be issued when the supply ceases.
Goods sent on sale or return basis
Where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the time of supply or 6 months from the date of removal, whichever is earlier.
Example
- XYZ limited after manufacturing product A from Hyderabad supplies goods to ABC limited of Bhubaneswar. Product A is removed from its factory in Hyderabad on 20th august. In this case, XYZ limited has to issue tax invoice on or before 20th August.
- XYZ limited provides taxable service to ABC limited on 3rd October. In this case, XYZ needs to issue a tax invoice for the services rendered within 30 days of supply of services, i.e. on or before 2nd November.
| Situations | Time limit |
| Supply of goods involving movement of goods | At the time of removal |
| Supply of goods but no movement of goods | At the time of delivery |
| Goods sent on approval basis | Before or at the time of supply or within 6 months from the removal, whichever is earlier |
| Goods (continuous supply) | On or before the date of issue of account statement or payment |
| services | Within 30 days of supply of service |
| Services (banks and NBFCs) | Within 45 days of supply of services |
| Services (Continuous supply), where due date of payment is ascertainable from the contract | On or before the due date of payment |
| Services (Continuous supply), where due date of payment is not ascertainable from the contract | Before or at the time of receipt of payment |
| Services (Continuous supply), where due date of payment is linked to completion of an event | On or before the date of completion of that event |
