Non-GST invoices and GST payment

Hello 

Can a service provider supplying services to a service exporter under a Letter of Undertaking (LUT) continue issuing non-GST invoices or pro forma invoices after exceeding the threshold limit of ₹20 lakhs?

Additionally, in the absence of a formal agreement between the service provider and the service exporter, can the service provider demand GST payment retrospectively if registration was delayed due to departmental processing?

Under GST law, can a service exporter be legally compelled to bear and pay the GST liability of the service provider in cases where the provider’s registration was delayed or not obtained on time?

 

Replies (2)
Quick Summary
Service providers crossing the GST threshold cannot continue issuing non-GST invoices. They must obtain registration and may issue revised tax invoices for past supplies within statutory limits. GST liability legally remains with the supplier, though commercial recovery from exporters may occur.

  • Invoice Compliance: A domestic service provider cannot continue issuing non-GST invoices after crossing the ₹20 Lakh threshold. They must apply for registration within 30 days and eventually issue Revised Tax Invoices for the interim processing period.

  • Retrospective Tax Demand: Yes, the supplier can demand the tax retrospectively. Section 31(3)(a) allows them to issue revised invoices within 1 month of getting their registration certificate to regularize past transactions.

  • Compelling the Exporter: The GST department holds the supplier liable, not the recipient. However, the exporter should commercially pay the retrospective tax only if the supplier provides a valid Revised Tax Invoice that allows the exporter to successfully claim Input Tax Credit (ITC) and a subsequent export refund.

  • Issuance of Non-GST / Pro Forma Invoices Post Threshold: Can a service provider continue issuing non-GST or pro forma invoices for more than six months after crossing the ₹20 lakh threshold, solely on the ground that GST registration was delayed by the department?

  • Revised Tax Invoices for Past Services: Is it permissible for a service provider to issue revised tax invoices for services rendered four to five months earlier? If so, is there a statutory time limit within which such revised tax invoices must be issued after obtaining GST registration, calculated from the date of the original non-GST or pro forma invoice?

  • Retrospective Regularization of Invoices: With respect to retrospective tax demand, how far back can non-GST or pro forma invoices be revised into GST-compliant tax invoices? For instance, can invoices that are three to four months old be revised, or is the revision restricted to invoices within one month? Is there a prescribed time limit for such regularization?

  • GST Liability in Absence of Refund Claim: If the service exporter is not claiming any GST refund, can the service provider nevertheless compel the service exporter to bear and pay GST liability for the period prior to registration?

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