When you are purchasing something, be it goods or services, there will always be a tax on it. A tax invoice is a helpful instrument in the GST system.
A registered dealer issues a tax invoice to the purchaser. The purchaser is usually another vendor who bought the goods or products to resell them again. The aim of giving a tax invoice is to avail of an input tax credit. Besides that, in a tax invoice, you need to include a tax identification number of the purchaser. Also, the tax invoice is issued in triplicate instead of duplicate like the other invoices. The seller gets two copies, and the purchaser receives the original one. You can get a obvious picture of what it’s like to use a sample tax invoice.
A tax invoice has a vital role in any country’s tax system at the end of the fiscal year. A business has to submit the details of their tax invoices to the relevant tax authorities. This is an essential process for the government to avoid tax evasion by any business.
Content of a sample tax invoice
Tax invoices usually consist of these things below.
- Invoice’s serial number
The invoice serial number is essential to make sure every order and every purchase by every customer is in the perfect order.
- Issue date of the invoice
The issue date is significant because it shows the timeline of the rules and purchases.
- Seller’s information details
Seller’s information details need to be on the invoice so the buyer can contact the seller if anything should happen.
- Buyer’s information details
The buyer’s information details need to be on the invoice so the seller can contact the buyer if anything should happen.
- Tax Identification Number
A tax invoice considered as a valid document, so a Tax Identification Number is essential to include in a tax invoice.
- Quantity of the goods
Supply of the assets needs to add because a tax invoice is usually used to resell the product. So the amount of product bought by the buyer is essential to include in a tax invoice.
- Price per unit
The price per unit is essential to show the buyer transparency of the cost.
- Total amount
The total amount is one of the essential parts of any invoices because it shows the full amount that needs to be paid by the buyer to the seller. Any taxes and discounts have to be included in the total amount as well.
- Tax charged
Tax charged by the transaction needs to be included as well. The document’s name is a tax invoice. Of course, the tax charged has to be on it.
- Authorized signature
Authorized signature by the person who has the authority is needed to increase the document’s legality.
In making a tax invoice, you need to follow the sample tax invoice with those pieces of information. A tax invoice is quite a delicate document, so you need to pay attention to its contents to ensure the document’s legality.