Question

Can a registered dealer supply taxable and exempted goods to registered dealer through single invoice .
as rule 46A talks about of supply to unregistered person he can issue single invoice as `invoice cum bill of supply`.
but for supply to registered person if one has to issue two invoices-- one as tax invoice and one as bill of supply, then I think unneccessarily more compliances required ( two invoices as well as two eway bill).

Answer

Law Applicable: As per Rule 46A of CGST Rules;
"Notwithstanding anything contained in rule 46 or rule 49 or rule 54, where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single 'invoice-cum-bill of supply' may be issued for all such supplies".

Intent of Law: This rule was introduced to simplify the paper work when multiple supplies are made some of them being exempt and others taxable. However this facility could not be extended to the occasions when supplies of the same nature are made to a registered person. This is because as per Section 16(2)(a) the ITC booking document have recognized to be only Invoice and Dr. Note.

Section 16(2)(a): "he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed"

So we can conclude that ITC can be booked by invoice & dr. note and ITC can not be booked by "bill of supply" & "invoice cum bill of supply".

Defect in Law: The problem in practical working will arise in the following situation;
An unregistered person procured some supplies of to begin his business. Supplies were made as taxable & exempt under the document of "invoice cum bill of supply". He now starts his business and as per section 18(1)(a) he is eligible to opening credits of his stock and as per 18(2) the supply should not be older than 1 year

Section 18(2): "A registered person shall not be entitled to take input tax credit under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply."

But now the person can not take ITC even on the supplies procured within previous 1 year because he has "invoice cum bill of supply" against which ITC can not be availed. (Reply dt.22/03/2019)