Guides · Counter billing
Cash memo vs tax invoice
A cash memo and a tax invoice can both hand a customer a bill, but they are not the same document. One is a simple record of a cash sale; the other is the formal GST tax invoice with all the fields the law requires.
How they differ
A cash memo is a straightforward bill for a sale, typically a cash purchase, recording the items and the amount. A tax invoice is the formal GST document, carrying the GSTIN, HSN, tax split, place of supply, and a serial number in the required series.
The difference is not just detail — a tax invoice is what supports input tax credit, while a plain cash memo does not carry the tax breakdown a buyer needs to claim it.
When each is used
A registered business making a taxable supply to a buyer who needs to claim credit issues a tax invoice. A simple cash memo suits an informal or non-credit sale, but a registered seller still has to issue a proper tax invoice where the law requires one.
So the choice is not free: it depends on registration, the type of supply, and what the buyer needs.
How Lekha issues the right document
Lekha lets a business bill over the counter and generate full GST tax invoices where they are needed, recording both into the same two-sided ledger.
Lekha generates GST-compliant delivery challans and tax invoices against a purchase order, with HSN, place of supply, and the right CGST/SGST or IGST split computed live, and gap-free financial-year numbering.
Questions
- What is the difference between a cash memo and a tax invoice?
- A cash memo is a simple bill for a cash sale; a tax invoice is the formal GST document with GSTIN, HSN, tax split, and place of supply that supports input tax credit.
- Can a buyer claim input tax credit on a cash memo?
- A plain cash memo does not carry the tax breakdown needed to claim input tax credit. A proper tax invoice is what supports the claim.
- When must a registered seller issue a tax invoice?
- Where the law requires it for a taxable supply — particularly to a buyer who needs the invoice to claim input tax credit.
This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.