Today’s post would be covering discussion on Section 122(1)(ii) of CGST Act, 2017. The relevant clause read as under-
“(1) Where a taxable person who––
(ii) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder;
Meaning of the Word “Bill”
The clause contains the word “Invoice” or “bill”. The word invoice has been defined under the Statue but the term “bill” has not been defined under the Statute. Although the term “bill” has been used sparingly in the statute. Apart from being used in section 122, the term has also been used in 132(1)(b) and 132(1)(c) of the CGST Act, 2017. Although Section 132(1)(b) does not throw any light on the meaning of the term “bill”, however section 132(1)(c) throws some light.
Section 132 contains punishment for certain offences and amongst them one of offence is in cases wherein recipient claims input tax credit using invoice or bill which has been issued without supply of goods or service or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax. Therefore, it seems that by the use of the term “bill”, legislature is referring to the document on which Input Tax Credit can be claimed by the recipient. Thus, it seems that the word “bill” has been used as a synonym to the word “invoice”.
Issue of invoice without supply of goods or services or both
The offence specified in the section relates to issue of invoice or bill without supply of goods in violation of the provisions of CGST Act, 2017 or rules made thereunder. The offence for supply of goods without issue of invoice or against an incorrect or false invoice is covered under section 122(1)(i) of CGST Act, 2017. This provision covers where no supply has been made but invoice or bill has been issued without supply of goods in violation of the provisions of CGST Act, 2017 or rules made thereunder. For example, Mr. Y issued invoice to Mr. X without supply of goods or Mr. Y had supplied goods to Mr. “X” but invoice was issued in the name of Mr. “Z”.
It would be apt to highlight that for offence under this para to be applicable Issue of Invoice or bill should be without supply of goods or services or both. Therefore, in cases wherein supply of goods or services or both has been made against an incorrect or false invoice, then in such case present clause would not be applicable and it would fall under clause (1) of sub-section (1) of section 122 of CGST Act, 2017. For e.g. Mr. Y has supplied goods to Mr. X worth Rs 2 Lakh. However, Mr. Y issues invoice of Rs 4 Lakh to Mr X. In such case it’s a case of issue of false invoice falling under clause (i) of Section 122(1) of CGST Act, 2017 rather than in the present clause.
Further, the condition provides that issue of invoice without supply of goods or services or both should be in violation of the provisions of CGST Act, 2017 or the rules made thereunder. The conditions for issue of invoice have been provided under section 31 read with Rule 46 of the CGST Rules, 2017. For e.g. violation of condition of Section 31 takes place wherein invoice has been issued without supply of goods to the recipient as section 31 only mandates to issue invoice on making taxable supply of goods.
However, it would be pertinent to highlight that Section 31 allows issuance of invoice before the supply of goods or services or both. Thus, for cases wherein the invoice has been issued before the supply of goods or services or both but supply would be made later on, such cases would not fall within the ambit of issue of invoice without supply of goods or services both in violation of the provisions of CGST Act, 2017 or rules made thereunder. The cases which would be falling would be wherein the provisions are violated and invoice is issued by violating such provisions.
