A tax invoice broadly contains the description of goods sold, their quantity, taxes charged, total taxable value, and other particulars. It is a piece of primary evidence that the recipient of goods can claim an input tax credit.
Benefits of having formats for tax invoice
Having a proper invoicing system is very helpful for a business in many ways. The availability of various invoicing formats has made it possible for a business to customise its invoice and thus make it more reliable and trustworthy. Some of the other benefits are-
Customise the invoice to advertise its brand and thus help in business promotion.
A business can make necessary changes to suit its business and industry requirements.
Various formats for a tax invoice
There are various formats of a tax invoice. ClearOne provides various invoice formats. A taxpayer can choose a format that best suits its business requirements. Some of the formats are shown below:
Ideal contents of a tax invoice
A valid tax invoice follows the same basic invoice format. An ideal tax invoice usually contains the following information:
Business name and contact details
GST and PAN number of the supplier and registered buyer
Customers name and contact details
Should contain the words ‘invoice’
Unique tax invoice number
Invoice date
Date of supply of goods
Place of supply
Description of goods or services provided
GST rate, HSN code, and tax amount
The gross value of goods sold
Discounts
Taxable amount
Signature of the supplier
Choosing the right format for a tax invoice
The main objective of a tax invoice for a recipient is to avail input tax credit. From a supplier’s point of view, they serve as proof of goods sold and provide data for financial reporting purposes. Thus, a business can choose the right format based on its business needs. Simpler and good looking formats help to enhance business finance in a better way.
Fields of a tax invoice that can be customised
Below fields of a tax invoice can be customised:
Customer name and contact details
Payment terms
Product description
Prices and units
Printing sales invoice with an authorised signature
By saving this information or creating a master list using an invoicing tool, one can avoid potential mistakes while typing out addresses and descriptions for each new invoice. In addition, it improves efficiency.
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