Income tax

1. HSN CODE
The Harmonised Commodity Description and Coding System generally referrea
to as "Harmonised System of Nomenclature" or simply "HSN" is a multipurpos
international product nomenclature developed by the World Customs Organisation.
comprises about 5,000 commodity groups, each identified by a six-digit code, arrangu
in a legal and logical structure and is supported by well-defined rules to achie
uniform classification. Without HSN, the system will not be able to pick the taxIa
for goods declared at the time of registration.
In case of turnover of less than 1.5 crore, HSN Code is not required
mentioned. Turnover between 1.5 to 5 crore, 2 digit HSN Code can be used. lf turo
is above 7 5 crore, HSN Code must have 4 digits.
be

2. INVOICE AND ACCOUNTS 271
Examples ofHSN Code
Confectionery items are of different types. Their HSN codes are as follows:
Item
HSN Code
Sugar Confectionery
Chewing Gum Sugar Coated
Other Sugar Confectionery without Cocoa
Jelly Confectionery
Boiled Sweets Filled
1704
170410
170490
17049010
17049020
17049030 Toffees, Caramels and Sweets.
SERVICE ACCOUNTING CODE (SAC)
As in the case of products or goods, it is essential to identify the services to levy
tax based on the type of service. The SAC or Service Accounting Code is
used to
identify services under GST. In case of services, each service provided is given an
unified code for recognition, measurement and taxation. Service will be classified as
per SAC issued by Government for service tax. This is same underGSTregime also.
For example, assume that a hotel provides restaurant services and outdoor catering
services. Though both the services may seem to be similar, the rate of tax applicable
nrestaurant services and outdoor catering services are different. There are different
SAC codes for billing of restaurant services and outdoor catering services.
Examples of SAC
SAC Code Name of Service
995411
996421
996422
996811
997120
Construction services of residential buildings
Long-distance transport services by Railways, Metro, etc.
Long-distance transport services through road
Postal services
Investment banking services.
DETAILS ABOUT TAX INVOICE
A tax invoice referred to in section 31 shall be issued by the registered person
ntaining the followingparticulars, namely:
Name, address and Goods and Services Tax Identification Number of the
supplier;
. A consecutive serial number not exceeding sixteen characters, containing
alphabets or numerals;
3 Date of its issue;
4 Name, address and Goods and Services Tax Identification Number or Unique
Identity Number, if registered of the recipient;
Name and address of the recipient and the address ofdelivery, along with the
name of the State and its code, if such recipient is un-registered and where
the value of the taxable supply is fifty thousand rupees or more;
Harmonised System of Nomenclature code for goods or services;
.
axable value of the supply ofgoods or services or both taking into account
discount or abatement, if any;
Rate oftax(central tax, State tax, integrated tax, Union territory tax or cess);
Description of goods or services,
guantity in case of goods and unit or Unique Quantity Code thereof;
3. Total value of supply of goods or services or both;

3. 272 GOODS AND SERVMICES TAX
11. Amount of tax charged in respect of taxable goods or services (central
tax,
tate tax, integrated tax, Union territory tax or
cess
Place of supply along with the name of the State, in the case of a sunni.
12. supplyin
the course of inter-State trade or commerce,
Address of delivery where the same is different from the place ofsupnl
Whether the tax is payable on reverse charge basis; and
1. Signature or digital signature of the supplier or his authorised representati
A typical tax invoice with all the mandatory fields under GST will look like thie
TAX INVOICE
Vijaya Traders Private Limited
GSTIN 04ARCPD987431Z5
13.
23/04/20117
5/1, Penthouse 01, 6th Floor, Rich
CLR 000009
Homes Apartment, Richmond
Road, Bengaluru, Karnataka-560025
Billing Details Shipping Details
Kantech Solutions Private Limited
Kantech Solutions Private Limited
Ground Floor, Building 2A, 23 & 24
AMR Tech Park Internal Rd
Ground Floor, Building 2A, 23 & 24
AMR Tech Park Internal Rd
Hongasandra, Bengaluru, Karnataka-560068 Hongasandra, Bengaluru, Karnataka-560068
Invoice Date Payment Terms Due Date
23/04/17 On Reciept 23/04/2017
S.
No.
Item HSN Qty. Unit Rate Total
Per
Disc- Taxable CGST SGST IGST
Descri
ption
countValue
item
Rate Amt. 7 Rate Amt. 7 Rate Amt. 7
1. Bathing 34011110
soap
10 pcs 20 200 200 9% 18 9% 18
2. Shampoo 34011111 8 pcs 50 400 400 9% 36 9% 36
Total 600 600 54 54
Total invoice value (in figure) 7 708
Total invoice value (in Words)
Rupees seven hundred and eight only
54 54
Amount of Tax subject to Reverse Charges
Terms& Conditions
Customer Notes Attachment
1. The shipping cost needs to be beared by the seller
This order is shipped through blue 1. Shipping_receipt.pa
dart courier
2. The seller is not responsible for any damage that
happens during the transit
For Vijay Traders Pvt. Ltd.
BILL OF SUPPLY
Supplying
exemptedgoods
or services or
2 both
Tax Invoice Bill of Supply
Registered
Person Paying tax under
compositionlevy

4. 273
ARill of Supply shall be
issuedin the following cases
Aregistered person supplyingnon-taxable goods and/or services, or
A registered person paying tax under the composition scheme.
Tn the case of Bills of Supply, the recipient is not entitled to take input tax credit.
Contents of Bill of Supply
ABill ofSupply shall be issued by the supplier containing following details:
(a) Name, address date of issue and GSTIN of the supplier,
b)Aconsecutive serial number, in one or
multiple series,
c Name, address and GSTIN of the registered recipient,
(d) HSN Code of goods or
Accounting Code for services,
(e) Description, the value of supply of goods or services or both taking into
account discount or
abatement, if any, andd
)Signature or digital signature ofthesupplier or his authorized representative.
RECEIPT VOUCHER' IN CASE OF ADVANCE COLLECTION
Sec. 31(3) & Rule 50]
On receipt of advance payment with respect to any supply of goods or services,
the registered person shall issue a Receipt Voucher with prescribed particulars,
evidencing receipt of such payment.
AReceipt Voucher' shall contain the following details:
(a) Name, address date of issue and GSTIN of the supplier,
(b) A consecutive serial number containing alphabets or numerals,
(c) Name, address and GSTIN, registered, recipient,
(d) Description of goods or services,
(e) Amount of advance taken,
()Rate/amount of tax charged in respect of taxable goods or services. (CGST,
SGST, IGST, UGST or
cess)
Place ofsupplyalongwith the name of State and its code, in case of a supply
inthe course of inter-State trade,
h) Whether the tax is payable on a reverse charge basis, and
(1) Signature or digital signature ofthe supplier or his authorized representative.
(Rule 55)
DELIVERY CHALILAN
Applicable for transportation of goods without the issue of the invoice.
(1) Supplies to which this is
applicable:
(a) Supply of liquid gas where the quantity at the time of removal from the
place of business of the supplier is not known,
b) Transportation of goods for jobwork,
(c) Transportation of goods for reasons other than by way ofsupply, or
d) Such other supplies as may be notified by the Board.
tha Consignor may issue Delivery Challan, serially numbered, in lieu ofinvoice at
(2
time of removal of goods for transportation.
inh anner ofpreparation ofDelivery Challan : The delivery challan shall be prepared
triplicate,in
(3).
case of supply ofgoods, in the following manner :
a) The original copy being marked as ORIGINAL FOR CONSIGNEE,
6) The duplicate copy being marked as DUPLICATE FOR TRANSPORTER, and
The triplicate copy being marked as TRIPLICATE FOR CONSIGNOR.
(4)
ame ere goods are being transported on a delivery challan in lieu of invoice, the
me shall be declared in WAY BILL.

5. 274 GOODS AND
SERVICES TAX
OWhere the goods being transported are for the purpose of supplv +.
but the tax invoice could not be issued at the time of removal of poa he
recipient
the purpose
(6) Tran
n a semi-knocked down orcompletelyknocked down condition:
se of supply, the supplier shall issue a tax invoice after delivery of
ansported
gor
nsport in knocked down condition: Where the goods are being transn.
first
a)The supplier shall issue the complete invoice before dispatch ofthe
subsequent
(b) The supplier shall issue a delivery challan tor each ot the subseouo
of corresponding
consignment,
(c) Each consignment shall be accompanied by copies or correspondina
Consignments, giving reference of the invoice,
delivery challan along with a duly certified coPy of the invoice, and
(d) The original copy of the invoice shall be sent along with the lat
consignment.
st
Sec. 34, CGST Act
CREDIT AND DEBIT NOTES
Issue of a Debit Note' or "Credit Note'
(1) Where a tax invoice has been issued for supply of goods and/or services; and
The taxable value and/or tax charged in that tax invoice is found to exceed the
taxable value or tax payable in respect of such supply, or
Where the goods supplied are returned by the recipient, or where services
supplied are found to be deficient.
Then, the registered person, who has supplied such goods and/or services, may
issue to the recipient a credit note.
No reduction in output tax liability of the supplier is permitted if the incidence
of tax/interest on such supply has been passed on to any other person.
(2) Where a tax invoicehas been issued and the taxable value and/or tax charged
in that tax invoice is found to be less than the taxable value and/or tax payable in
respect of such supply, then the registered person, who has supplied such goods and/or
services, may issue to the recipient a Debit Note.
(3) The expression "Debit Note" shall include a "Supplementary Invoice". Credit
notes and debit notes shall contain the prescribed particulars otherwise, these noves
may not be considered for adjustment of tax liabilitv.
CREDIT NOTE
Supply ofgoods andlor services
SUPPLIER
Tax Invoice is issued RECIPIENT
Scenario 1: Tax Charged/TaxableValue more than Tax payable/TaxableValue
(with respect to that supply) or where the goods supplied are returned
by the recipient, or where services supplied are found to be deficient, than
SUPPLIER
ISsue Credit Note RECIPIENT

6. INVOICE AND ACCOUNTS 275
DEBIT NOTE
Supply of goods and/or services
SUPPLIER RECIPIENT
Tax Invoice is issued
Scenario 2: Tax Charged/Taxable Value less than
Tax payable/Taxable Value (ith respect tothat supply), than
SUPPLIER RECIPIENT
Issue Debit Note
Declaration of Credit/Debit Note in the return
(1) Credit Note : Any registered person who issues a credit note shall declare the
details of such credit note in the return for the month during which such credit note
has been issued. The tax liability shall be adjusted in such manner as maybe
prescribed.
However, if the incidence of tax and interest on such supply has been passed on
to any other person, then no reduction in output tax liability of the supplier shall be
permitted.
(2) Debit Note: Any registered person who issues a debit note shall declare the
details of such debit note in the return for the month during which such debit note
has been issued and the tax liability shall be adjusted in such manner as may be
prescribed.
Contents of a 'Debit' or 'Credit note'
(a) The word "Debit/Credit Note", wherever applicable, indicated prominently,
A Credit or Debit Note shall contain the following details
Name, address date of issue and GSTIN of the supplier,
(c) Nature of the document,
A consecutive serial number containing alphabets or numerals,
(b)
(d)
Name, address and GSTIN or UIN,iftheregistered recipient, and the address
(e)
ofdelivery, along with the name of State and its code, if such recipient is
unregistered,
(Serial number and date ofthe corresponding tax invoice or, bill of supply,
g
the tax credited or debited to the recipient, and
h) Signature or digital signature ofthe supplier or his authorized representative.
(g)
(f
Value of taxable supplyofgoods or
services, a rate of tax and the amount of