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Payment Voucher Format

A registered entity under GST must pay tax under the reverse charge mechanism whenever:

A registered person/entity makes supplies on a tax payable under a reverse charge mechanism.

The recipient receives supplies from an unregistered individual.

In these cases, the registered person/entity liable to pay tax must issue an invoice for the goods or services received from the supplier. Furthermore, the registered person receiving supplies must give a Payment Voucher to the supplier when making a payment.

Each of the categories of vouchers has its payment voucher format too. Therefore, individuals should be aware of the different vouchers and how to use them correctly. So, let’s get started with this article on payment vouchers and their types.


What is a Payment Voucher?

Every individual or business needs a voucher for all payments, and they make it either directly or through bankers. Payment vouchers apply to all payments made in the following manner:

  1. Direct bank payments made to its business customers
  2. Payments by check
  3. Payments in cash
  4. Pay orders and bank DDs (demand draughts)

A business firm receives third-party payments. Instead of a voucher, you must prepare a journal voucher in this case.

Example of a Payment Voucher

You paid Rs 2 lakh for raw cotton at 5% in Delhi. In this case, you must pay GST as a reverse charge. As a result, CGST and SGST are on a reverse charge basis of Rs 10,000 (5% of Rs 2,00,000).


Types of Vouchers

Even though small businesses and organisations have a limited number of bank and cash transactions, they can use a single voucher type to record all the above payments. However, many cash and bank payments occur daily in larger organisations and businesses. As a result, you need two types of vouchers to record the transactions:

  1. Voucher for Bank Payments: If a cash payment occurs through the business firm or its bankers, you can use the bank voucher or bank payment voucher.
  2. Voucher for Cash Payments: The cash voucher payment format is for making a payment in cash.

Payment Voucher: Contents

You should include the following information on the Payment Voucher:

  1. Supplier’s name, address, and GSTIN (if registered)
  2. The fiscal year’s unique serial number (not exceeding 16 characters )
  3. Date of payment voucher issuance
  4. The recipient’s name, address, and GSTIN
  5. Goods and services descriptions (on which tax payment happens on the Reverse Charge mechanism)
  6. Payment made to the Supplier

Note: The GST rate and the amount of tax levied under the CGST, SGST, and IGST or cess

If the transaction is interstate, include the state name and code as the place of supply.

Signature/Digital Signature of the supplier or the supplier’s authorised representative


Voucher Sources

All vouchers have a source against the payments, and they are:

Cash Memos

You can use the cash voucher format for official payment vouchers(called payment voucher format) for procured or purchased materials amidst business operations. An example of a cash memo would be a bill you issue against a cash purchase.

Challans

Generally, you can pay all tax payments in India using the challan payment voucher format and by the various concerned departments. Hence, when you make a tax, fee or cash payment to any of these departments in a cash voucher format, the concerned department issues the challan counterfoil. 

It is proof of the payment and a signed copy of the challan. An example would be college fees and municipal taxes.

Receipts

Receipts are payment vouchers issued by service providers’ payment receivers from a business firm’s running account. For example, suppose an organisation buys goods or services from a business on a credit basis and makes payments on a monthly or weekly basis. In that case, they issue a receipt as proof of payment. 

Hence, they can issue a debit voucher or receipt as proof of an advance, deposit, etc. Such receipts are advances or vouchers, as is the case of a security deposit or an advance that you pay for the services you render.

Staff Vouchers

Every business has several small transactions requiring no cash memos in cash voucher format, bills, or receipts for purchases made for business or official use. 

For example, small transactions include xerox copying bills for urgent business documents or an auto-rickshaw ride for a staff member travelling on official business. In such cases, the employee creates a cash payment voucher in a staff voucher style rather than a cash voucher format.

Payment Voucher: Features

The cash payment voucher format or the cash voucher format generally has the below-mentioned features:

  1. Logo, name, address and telephonic contact number of the payment issuing company
  2. Heading stating a payment voucher
  3. A Date field to enter the correct date of issue of payment
  4. A field for the amount in figures and words
  5. The Mode of payment field to mention whether payment is in cash or cheque 
  6. To whom you make the payment 
  7. Payee Details
  8. Towards the field, write the details regarding the transaction for which you make the payment.
  9. An authorised signatory must approve a payment voucher from the accounts department for payment approval.
  10. The cashier handling the transactions pays the amount in a payment voucher. 
  11. The receiver signs in the signature field when they acknowledge receiving the payment

Payment Vouchers in GST

You can download the payment voucher format as Microsoft Word, PDF, Excel or XLS. Under the Goods and Services Tax laws, you must cover all transactions involved in a business enterprise with an invoice, bill, challan or payment voucher. The payment voucher type depends on the services and goods transaction.

GST Payment Vouchers are critical when you pay GST under the RCM. It applies to transactional payments between the GST taxpayer and the business’s unregistered suppliers. 

When a registered GST taxpayer receives services or goods from an unregistered supplier, the RCM, or Reverse Charge Mechanism, requires the taxpayer to issue a payment voucher and pay the GST. 

The RCM operates under the following conditions:

  1. When an unregistered supplier provides the services or goods to the GST-registered taxpayer
  2. If RCM applies to services or goods purchased by a GST-registered taxpayer

GST Payment Voucher Format Checklist

You must fill these particulars in the GST cash payment voucher format in MS Word:

  1. Name of the supplier, address and GST Number or GSTIN 
  2. The fiscal year’s unique payment voucher serial number 
  3. Issue the date of the payment voucher
  4. The recipient’s name, address, and GSTIN, and if there is no GSTIN, the name and address 
  5. Description of services/goods bought on which you use RCM and pay tax
  6. The GST tax rate and amount of tax charged under SGST, CGST, IGST and Cess 
  7. Details of the supply place or where the transaction is affected. Mention the state code and state name in case of an interstate supply
  8. Supplier or supplier’s authorised signatory/ representative’s signature(digital or manual) and seal.

FAQs about Payment Voucher Format

When do I need a payment voucher?

A payment voucher is a payment by a person or a business firm directly or through bankers. You can use it for the below scenarios:
For making bank payments directly to its business customers
For making cheque payments
For making payments in cash
For making bank DDs or demand draft payment
For making third-party payments for a business firm

Where do I use the GST payment voucher, and why?

The GST payment voucher covers RCM transactional payments between the GST taxpayer and unregistered suppliers of the business. You cannot issue a GST tax invoice if you are an unregistered taxpayer. Hence you must use the reverse charge mechanism to make a GST payment voucher.

What do you mean by GST RCM?

The RCM mechanism requires the new GST Payment Voucher. When a registered GST taxpayer receives services or goods from an unregistered supplier, the RCM, or Reverse Charge Mechanism, requires the taxpayer to issue a payment voucher and pay the GST.


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