## Basics About Tax Invoice

Whenever a registered person makes a taxable supply, a tax invoice must be issued. Key aspects:

### HSN Code Requirement

HSN code is mentioned to identify goods/services supplied. Standard HSN is an 8-digit code, but the number of digits required on invoice depends on aggregate turnover in preceding FY:

Aggregate Turnover (Preceding FY)	B2B Supply	B2C Supply
Up to ₹5 crore	4 digits	4 digits (optional)
More than ₹5 crore	6 digits	6 digits

### Number of Copies of Invoice

Supply Type	Copies	Distribution
Goods	3 copies	1st – Recipient; 2nd – Transporter; 3rd – Supplier
Services	2 copies	1st – Recipient; 2nd – Supplier

### When Tax Invoice/Bill of Supply is NOT Required

Registered person may skip issuing tax invoice/bill of supply if ALL THREE conditions are met:

1. Value of supply < ₹200

2. Recipient is unregistered (composition person is treated as registered for this purpose)

3. Recipient does not require an invoice.

A consolidated invoice can be raised for such supplies at end of day.
Exception: This relaxation does NOT apply to a registered person providing services by way of admission to exhibition of cinematograph films in multiplex cinemas.

### Bill of Supply

Issued by persons making non-taxable supplies (composition supplier, exempt goods supplier, etc.).
No tax invoice required — only Bill of Supply is issued.

### Invoice-cum-Bill of Supply

When a supplier makes both taxable and exempt supplies to an unregistered person, no need to issue 2 separate documents.
Single Invoice-cum-Bill of Supply can be issued.

### Other Documents (Issued on Specific Occasions)

Event	Document
On receipt of advance	Receipt Voucher
On refund of advance	Refund Voucher
On payment under RCM	Payment Voucher

### Invoice Responsibility under RCM

Scenario	Who Issues Invoice
Supplier is registered under GST	Supplier issues tax invoice
Supplier is unregistered (or registered only for TDS purposes)	Recipient issues self-invoice

### Treatment of Advance When Details Unknown

If, at the time of receipt of advance, the rate of tax and nature of supply (inter/intra-state) are not determinable:

Treat the rate as 18%
Treat the supply as Inter-state supply

### Recipient Details on Tax Invoice for Unregistered Recipient

Name, address and GSTIN of recipient must be mentioned even if recipient is unregistered:

If value exceeds ₹50,000, OR
Always (regardless of value) in case of supply of online money gaming OR taxable services provided by ECO/OIDAR — mention name, address, PIN code and State (treated as address on record).

Worked example

### Example 1

Example 1: ABC Ltd. has aggregate turnover of ₹3 crore in FY 2023-24. What HSN digits required on its B2B invoices in FY 2024-25?

Answer: 4-digit HSN (turnover ≤ ₹5 crore).

### Example 2

Example 2: XYZ Ltd., turnover ₹7 crore, makes a B2C supply. HSN digits required?

Answer: 6 digits (turnover exceeds ₹5 crore — 6 digits mandatory for all supplies).

### Example 3

Example 3: A grocery shop sells goods worth ₹150 to an unregistered customer who doesn't ask for invoice. Is tax invoice mandatory?

Answer: No. All three conditions met (value < ₹200, unregistered, no invoice requested). A consolidated daily invoice can be raised.

### Example 4

Example 4: A multiplex cinema sells a ticket worth ₹150 to a walk-in customer. Invoice required?

Answer: Yes. The < ₹200 relaxation is not available to multiplexes for cinematograph film exhibition.

### Example 5

Example 5: A supplier receives ₹50,000 advance on 1st April but doesn't know if supply will be goods/services or its rate. How to invoice?

Answer: Treat advance as taxable at 18% as Inter-state supply at the time of receipt voucher issuance.

### Example 6

Example 6: PQR Ltd. (registered) procures GTA services from an unregistered transporter under RCM. Who issues invoice?

Answer: PQR Ltd. (recipient) must issue a self-invoice since supplier is unregistered.

⚠️ Common exam mistakes

Forgetting that the ₹200 invoice exemption requires ALL three conditions cumulatively — missing even one (especially that recipient does not request invoice) makes invoice mandatory.
Treating composition supplier as unregistered for the ₹200 exemption — composition supplier is treated as registered, so the exemption doesn't apply.
Issuing 2 copies for goods or 3 copies for services — goods need 3 copies, services need 2.
Missing the multiplex cinema exception to the ₹200 rule.
Forgetting to apply 18% IGST default when advance details are uncertain.
Issuing a separate tax invoice and bill of supply when an invoice-cum-bill of supply could be used (for B2C with mixed taxable + exempt).
Not issuing self-invoice when recipient procures from unregistered supplier under RCM.

Reference: Section 31 and Rules 46, 49 — CGST Act, 2017 / CGST Rules, 2017

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Basics of Tax Invoice — HSN, Copies, Bill of Supply

Worked example

⚠️ Common exam mistakes