Identify When the Provision Applies

• The provision kicks in only when there is a supply made for a consideration. Supply means any sale, transfer, or provision of goods or services, and consideration is the monetary value or compensation received.
• The person making this supply and liable for the tax (usually the seller, service provider, or registered taxable person) is responsible under this section.

Person Liable to Pay Tax

• The responsibility lies on the person who is liable to pay the tax on the supply.
• This could be the supplier or, in certain reverse charge situations, the recipient of the supply.

Documents Covered

• The law requires the tax amount to be indicated in:
  • Documents related to assessment: These include assessments for tax collected, taxable value determined, and tax payable calculations.
  • Tax invoices: The key document issued at the time of supply showing price, tax rate, tax amount, etc.
  • Other like documents: Any similar document issued that pertains to the supply and tax liability.

Nature of Information to be Indicated

• The tax amount indicated should be the amount of tax which forms part of the price at which the supply is made.
• It should be prominently indicated, meaning it must be clearly visible and distinct on the document, not hidden or ambiguous.
• This means the tax is included as part of the total price but separately reported for clarity.

Purpose of the Provision

• To ensure transparency in commercial transactions.
• Customers and tax authorities can clearly see how much tax is charged on the supply.
• Prevents disputes or confusion about whether tax is included or excluded from the price.
• Facilitates easier tax administration and audit by providing clear evidence of tax collected.

Effect Despite Other Laws or Provisions

• The section explicitly states “Notwithstanding anything contained in this Act or any other law for the time being in force,”.
• This means the requirement to indicate the tax amount overrides any conflicting provision in this Act or any other law.
• Ensures uniformity in tax invoice documentation across different legal frameworks.

Compliance and Penalties (Implied)

• Failure to comply with this requirement could lead to penalties, disallowance of input tax credits by recipients, or issues during tax assessments.

It promotes professional and lawful behavior in tax invoicing.