Cash memo vs tax invoice

What people mean by cash memo

A cash memo is the slip a counter gives when a customer pays immediately: item, quantity, rate, total, and often a stamp saying paid. It doubles as invoice and receipt. The term comes from pre-GST days and is still printed on many bill books.

What the document must contain depends on who you are, not what it is called:

The ₹200 rule

For a regular taxpayer, the rules allow one relief for small consumer sales. If the value of a supply is less than ₹200, the buyer is unregistered, and the buyer does not ask for an invoice, you need not issue a tax invoice for that sale. Instead, you issue one consolidated tax invoice at the close of each day covering all such sales.

Example: a paan and cold-drink counter in Varanasi makes 140 sales under ₹200 on a Saturday, totalling ₹11,860 including tax. At closing, one consolidated tax invoice for ₹11,860, split into taxable value and GST by rate, is entered. Any customer who asks for a bill still gets one.

This is general information, not tax advice. Confirm the current rule on cbic-gst.gov.in.

What a GST-compliant counter bill shows

Price tags in retail are usually GST-inclusive, so the bill works backwards: ₹2,360 ÷ 1.18 = ₹2,000 taxable value. Make sure your billing system back-calculates correctly and rounds only the final total.

Why customers ask for a pakka bill

• Warranty: manufacturers ask for a proper invoice with the serial number.
• Business buyers: a registered buyer needs your tax invoice with their GSTIN to claim credit. See GST on sales to unregistered buyers for the other side.
• Reimbursement: employees claiming expenses need a full bill.

A kachcha slip without tax details helps nobody: the customer cannot use it and your sales figure becomes questionable.

Cash sales and your returns

Counter sales to consumers are B2C supplies in GSTR-1, reported in summary by rate and state rather than invoice by invoice, except for larger inter-state B2C bills. Your day's cash memos, consolidated bills and UPI receipts should add up to the B2C figure. See B2B vs B2C invoices in GSTR-1.

Daily closing checklist for a counter

1. Print or note the last bill number of the day.
2. Prepare the consolidated invoice for sub-₹200 sales, if you use the relief.
3. Match cash in drawer plus UPI and card settlements with the day's bills.
4. Note cancelled bills with reason; keep all copies.
5. Enter or sync the day's sales into your books the same day.

Common mistakes

• Two bill books, one with GST and one without, for the same registered shop.
• Charging GST on a bill as a composition dealer.
• Writing cash memo when the buyer gave their GSTIN; issue a proper tax invoice with their details.
• Not issuing a bill for UPI sales because the bank has the record. The bank does not replace your invoice.

Doing this with Tally and Cashflow OS

Counter sales booked in TallyPrime sync to Cashflow OS, so the owner sees today's sales, cash and bank on the home screen and can compare them with the same day last month. For showrooms, the walk-in module looks up a customer by mobile number and shows past visits and wishlists, and a sales order or sales voucher can be posted to Tally from the phone. See showroom walk-ins.