Under GST, when a receiver procures taxable supply of goods and/or services from an unregistered person, the liability of GST payment falls on the receiver of goods and/or services. Such a mechanism, under GST, is termed as Reverse Charge Mechanism(RCM) . As per the Reverse Charge Mechanism(RCM) , the receiver (Taxpayer) holds the responsibility to generate invoices in respect of goods and/or services received. Furthermore, while making the payment for the given supplies the receiver is also required to issue a payment voucher to registered person for the given supplies.
Preparation of Payment Voucher for Goods/Services
As per CGST Act, 2017 vide section 31(3)(g), the recipient (a registered taxpayer) is required to issue a payment voucher to the supplier during the payment of transactions(goods or services) on which reverse charge is applicable.
This payment voucher should consist of details as given below:
- Name, address of the supplier.
- A consecutive serial number not exceeding 16 characters of any combination which unique for the financial year.
- Date of issue of payment voucher.
- Name, address, and GSTIN of the recipient.
- Description of the goods and service on which tax is paid on reverse charge basis.
- Amount paid to the supplier.
- The rate and amount of tax charged under different heads CGST, SGST/UTGST or IGST and cess.
- Place of supply if the transaction is interstate along with the state name and code.
- A signature or Digital signature of the supplier or the authorized representative of the supplier
The need for Payment Voucher
Besides being a mandatory action under Reverse Charge Mechanism (RCM), the payment voucher is a document that acts as an evidence for the transaction which has taken place between the recipient and the supplier (a non-registered person) and thus in the other words can be said as proof of monetary transaction.
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