Think of a tax invoice as the backbone of GST — it is the document that unlocks Input Tax Credit (ITC) for your buyer. No valid invoice means no ITC. That is why Section 31 is so heavily tested, and why every registered dealer must get the timing and type of document exactly right.
For goods, the invoice must be issued before or at the time of removal when the supply involves movement, or before or at delivery when there is no movement. For services, you have more flexibility — the invoice can be issued before or after the service, but within 30 days of supply (45 days for banks, insurance companies, and telecom providers). Now, Section 31(3) lists several other documents you must know cold — this sub-section is asked frequently as a 4–5 mark question:
- Bill of Supply: Used instead of a tax invoice when supplying exempt goods or services, or when paying tax under the Composition Scheme (Section 10). Since no GST is charged, no tax invoice is raised.
- ₹200 threshold: If the supply value is less than ₹200, the recipient is unregistered, and they do not require an invoice, you can skip issuing a tax invoice or bill of supply altogether.
- Receipt Voucher: The moment you receive an advance payment, issue this immediately. It acknowledges receipt with tax details but is not a tax invoice.
- Refund Voucher: If the advance was received and a receipt voucher issued, but the supply never happens, cancel it with a refund voucher to the payer.
- RCM Invoice + Payment Voucher: Under Reverse Charge Mechanism (Section 9(3)/(4)), the registered recipient (not the supplier) must self-issue an invoice upon receiving goods/services from an unregistered person, and a payment voucher when actually paying that supplier.
- Revised Invoice: If registration is delayed, you can issue a revised invoice within 1 month of receiving the registration certificate, covering the gap period from the effective date of registration.
For continuous supply of goods, issue the invoice at each successive statement of accounts or payment. For continuous supply of services, timing depends on the contract: if a due date is fixed → invoice by due date; if no due date → invoice before or at payment; if linked to an event → invoice by event completion. For goods sent on approval, the invoice must be issued at the time of supply or within 6 months of removal, whichever is earlier.
📊 Worked example
Example 1 — Advance Payment, Receipt Voucher & Refund Voucher
Rajesh & Co. Pvt. Ltd. (registered under GST) enters a contract to develop software for Mr. Sharma. On 1 March 2025, Mr. Sharma pays an advance of ₹1,18,000 (₹1,00,000 value + ₹18,000 GST @ 18%). By 31 March 2025, the project is cancelled before any service is provided.
| Step | Action | Date |
|------|--------|------|
| 1 | Advance received → Issue Receipt Voucher for ₹1,18,000 (₹1,00,000 + ₹18,000 GST) | 1 March 2025 |
| 2 | No supply made, no tax invoice issued | — |
| 3 | Issue Refund Voucher to Mr. Sharma for ₹1,18,000 | 31 March 2025 |
Answer: Receipt Voucher on advance receipt; Refund Voucher on cancellation. No tax invoice is issued at any point.
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Example 2 — Continuous Supply of Services (Contract-Based Due Date)
Ms. Iyer's management consulting firm has a retainer contract with ABC Ltd. for ₹5,00,000 per month + GST @ 18% (= ₹5,90,000 per month). The contract states payment is due on the 7th of the following month.
Question: By when must Ms. Iyer issue the invoice for January 2025 services?
Working:
- Due date of payment is ascertainable from the contract → Section 31(5)(a) applies.
- Invoice must be issued on or before the due date of payment.
- Due date for January services = 7 February 2025.
Answer: Ms. Iyer must issue the invoice for ₹5,90,000 on or before 7 February 2025.
⚠️ Common exam mistakes
- Students issue a tax invoice for exempt supplies — this is wrong. For exempt goods or services, the correct document is a Bill of Supply. A tax invoice implies GST is being charged; a bill of supply signals that no GST applies.
- Forgetting the conditions for the ₹200 exemption — the rule only applies if the recipient is unregistered AND does not require an invoice. Don't assume you can skip invoices for all low-value transactions with registered buyers.
- Confusing the revised invoice deadline — the 1-month window runs from the date of the registration certificate, not from the effective date of registration. These two dates differ; always anchor to the certificate date.
- Applying one rule to all continuous supply of services cases — there are three separate triggers (contract due date / actual payment / event completion). Read the exam fact pattern carefully and pick the right clause; using payment-based timing when a contract due date is specified will cost you marks.
- Under RCM, assuming the unregistered supplier issues the invoice — wrong. The registered recipient is responsible for issuing the self-invoice and the payment voucher. Both documents are mandatory and must be issued by the recipient, not the supplier.
📖 Bare Act text — Section 31, CGST Act 2017
(click to expand)
(1) A registered person supplying taxable goods shall, before or at the time of,—
(a) removal of goods for supply to the recipient, where the supply involves movement of goods; or
(b) delivery of goods or making available thereof to the recipient, in any other case,
issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed: Provided that the Government may, on the recommendations of the Council, by notification, specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed.
(2) A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed: Provided that the Government may, on the recommendations of the Council, by notification and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which—
(a) any other document issued in relation to the supply shall be deemed to be a tax invoice; or
(b) tax invoice may not be issued.
(3) Notwithstanding anything contained in sub-sections (1) and (2)––
(a) a registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him;
(b) a registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
(c) a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed: Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
(d) a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment;
(e) where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment;
(f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
(g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
(4) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.
(5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of services,––
(a) where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;
(c) where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.
(6) In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply made before such cessation.
(7) Notwithstanding anything contained in sub-section (1), 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 six months from the date of removal, whichever is earlier.
Explanation.––For the purposes of this section, the expression ―tax invoice‖ shall include any revised invoice issued by the supplier in respect of a supply made earlier.
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