Taxation
Payment Receipt vs GST Receipt Voucher: Format and Rules
Payment receipt or GST receipt voucher? What each must contain, when GST is due on an advance, refund vouchers, and the ₹2 lakh cash limit under income tax.
In short
A payment receipt acknowledges money received against a sale already invoiced; GST prescribes no format for it and no tax arises from it. A receipt voucher is different: GST requires one under Rule 50 whenever you receive an advance before supplying, and for services the GST on that advance is payable in the month it is received.
- A payment received against an invoice already issued needs a plain payment receipt; the tax was already charged on the invoice.
- An advance received before supply needs a receipt voucher under Rule 50, with the tax rate and tax amount.
- For services, GST is payable on an advance when it is received; for goods, most registered suppliers pay GST only with the invoice.
- If an advance is refunded without a supply, issue a refund voucher under Rule 51.
- Under income tax, you cannot accept ₹2 lakh or more in cash from one person in a day, for one transaction or for one event (Section 269ST of the 1961 Act, carried into the Income-tax Act, 2025; confirm the current section with your CA).
Two documents that are easy to confuse
When a customer pays you, the document you hand over depends on when the money arrives:
- After the invoice — the sale has happened and the GST was charged on the invoice. You issue a payment receipt, which simply acknowledges the money.
- Before the supply — the customer is paying an advance. GST requires a receipt voucher under Rule 50, and for services the tax on that advance is due now.
Getting this wrong is a common source of short-paid GST on advances for services.
For an everyday payment receipt, the free payment receipt generator makes one as a PDF without signing up.
The payment receipt
A payment receipt confirms that you received money against an invoice. GST does not prescribe its format, but a useful one carries:
- The words “Payment Receipt”, a receipt number and the date.
- Your business name, address and GSTIN.
- The customer’s name and address.
- Amount received, in figures and in words.
- Mode of payment — cash, UPI, NEFT/RTGS, cheque — with the reference number, UTR or cheque number.
- The invoice or invoices it settles, with the amount applied to each.
- Balance still outstanding, if any.
- Signature of the person receiving.
Point 6 is the one most often left out, and the one that matters most. A receipt that says “₹50,000 received” without naming invoices leaves both sides guessing which bills are still open, and that is how customer ledgers drift out of agreement.
The receipt voucher (Rule 50)
When an advance arrives before you supply, Rule 50 requires a receipt voucher with:
| Field | Notes |
|---|---|
| Supplier’s name, address and GSTIN | |
| Serial number | Up to 16 characters, unique in the financial year |
| Date of issue | |
| Recipient’s name, address and GSTIN or UIN | If registered |
| Description of goods or services | |
| Amount of advance | |
| Rate of tax | CGST + SGST/UTGST, or IGST, and cess if any |
| Amount of tax | |
| Place of supply | With state name and code, for inter-state supplies |
| Reverse charge | Whether tax is payable on reverse charge |
| Signature | Of the supplier or an authorised person |
If the rate of tax is not known when the advance arrives, charge 18%. If it is not known whether the supply will be inter-state or intra-state, treat it as inter-state.
When is GST due on an advance?
| Advance for | GST on the advance |
|---|---|
| Services | Payable in the month the advance is received |
| Goods | Most registered suppliers pay nothing on the advance; GST is due with the invoice |
For services, the time of supply is the earlier of the invoice date and the date of payment, so an advance received in September is taxed in September’s return even if the invoice is issued in November.
Worked example (services)
A design studio in Gujarat receives an advance of ₹59,000 from a client in Gujarat for work taxed at 18%. The advance is treated as inclusive of tax:
- Taxable value: ₹59,000 × 100 ÷ 118 = ₹50,000
- CGST 9%: ₹4,500 and SGST 9%: ₹4,500
The studio issues a receipt voucher for ₹59,000 showing these figures, and pays ₹9,000 of GST with that month’s return. When the final invoice is raised, the tax already paid on the advance is adjusted against the tax on the invoice.
Refund voucher (Rule 51)
If an advance is returned because the order is cancelled, issue a refund voucher referring to the original receipt voucher. It carries the same supplier and recipient details, the amount refunded, and the tax rate and amount. The GST paid on the advance is then adjusted in your return.
Cash limits under income tax
GST does not limit cash receipts, but income tax does. You cannot receive ₹2 lakh or more in cash from one person in a single day, for a single transaction, or for one event or occasion. The penalty equals the amount received.
Most people know this rule as Section 269ST of the Income-tax Act, 1961. The Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026, carries it under a new section number; confirm the current section, limit and penalty with your CA.
Splitting one sale into several cash receipts of under ₹2 lakh does not help: the limit applies per transaction as well as per day.
Common mistakes
- No receipt voucher for an advance on services, and no GST paid on it until the invoice.
- Receipts that do not name the invoice they settle.
- Receipt numbers in the invoice series. Give receipts a series of their own.
- Accepting large cash payments without checking the ₹2 lakh limit.
How VyapRise handles receipts
In VyapRise, you record a payment receipt against the customer and apply it to one or more of their open invoices. Any amount not applied to an invoice stays on the customer’s account, so the customer ledger and the outstanding report always show which bills are still open, and a printed receipt names exactly what was settled. Payment receipts are part of the Pro plan (a yearly plan) and open during the free trial; on the Free plan, a payment is recorded on the invoice itself.
For a single receipt without an account, use the free payment receipt generator.
Frequently asked questions
Is a payment receipt mandatory under GST?
Not for a payment against an invoice already issued — GST prescribes no format for it, and the tax was charged on the invoice. A receipt voucher is mandatory when you receive an advance before the supply; Rule 50 lists its contents.
Is GST payable on an advance received?
For services, yes: the time of supply is the earlier of the invoice and the payment, so GST is due when the advance arrives. For goods, most registered suppliers do not pay GST on advances; the tax is due when the invoice is issued.
What rate of GST applies to an advance if the rate is not yet known?
Rule 50 says that if the rate cannot be determined when the advance is received, tax is charged at 18%. If it is not known whether the supply will be intra-state or inter-state, it is treated as inter-state and IGST applies.
What if the order is cancelled after an advance was taken?
Issue a refund voucher under Rule 51 when you return the advance. If you had paid GST on the advance, you adjust it in your return once the refund voucher is issued.
How much cash can a business accept from a customer?
Less than ₹2 lakh from one person in a single day, for a single transaction, or for one event or occasion — the rule known as Section 269ST, carried into the Income-tax Act, 2025 (confirm the current section number with your CA). Accepting more attracts a penalty equal to the amount received.