What is Self Invoicing?

What is Self Invoicing?

Self-invoicing is to be done when you have purchased from an unregistered supplier AND such purchase of goods or services falls under reverse charge.

This is due to the fact that your supplier cannot issue a GST-compliant invoice to you, and thus you become liable to pay taxes on their behalf. Hence, self-invoicing, in this case, becomes necessary.

To create such an invoices on ClearTax GST software, follow the below steps:

Step 1 – Click on ‘+ New Purchase Invoice’ to create a new invoice

Step 2 – As you can see, you need to fill data in multiple fields. Let’s understand each field in detail:

1. Enter the serial number of the bill into the field marked ‘Invoice Serial Number’. Since your supplier has not issued an invoice and you are creating an invoice on their behalf, you need to add a serial number on your own. You can create and maintain a serial number series for reverse charge bills, for easier invoicing

2. Enter the ‘Invoice Date’. This date must be based on time of supply

3. Enter any detail such as the order number etc., into the field marked ‘Reference Number’

4. Under ‘Due Date’, you have to mention the date by when you have to make the payment to the supplier for the purchase you made (mentioning this date is not mandatory)

5. Under ‘Vendor Name’, enter the supplier’s name. Remember this name cannot be your own name, even if you are doing self-invoicing under reverse charge

6. In case the vendor’s name is not set already, you can add a new vendor

7. Enter details of goods/ services purchased

8. From the drop-down under ‘Advance Settings’, select ‘Reverse Charge’

9. Now, fill in all the details displayed on your screen.

Step 3 – After filling all the other details, click on Save.