Always ask for bill- for a receipt or bill of payments made for goods purchased or services availed is not a new practice. However many fail at this simple task and do not ask for bills. Did we ever realize how much this unrealized practice can cost the nation. Call it their ignorance or carelessness, customers who do not ask for bills are not contributing to the nation’s development. Surprised? Don’t be. Know here how you can do a favour to your country by asking for a bill.
No bill leads to black money
The seller/vendor/supplier whom you bought the products or services from, should furnish a hard copy of a printed bill. They would keep a duplicate copy for themselves. In case you don’t ask for a bill, the seller’s profit or income on that transaction isn’t registered and not asking for a bill leaves no evidence that any monetary transaction ever took place. Taking advantage of that, the income made by the shop owner will most likely not declare to the Government. This leads to tax evasion and this practice generates black money. It is very important for the Government to collect the full amount of taxes because taxes are a major source of funds which they use for the development of the nation.
The recent move by the Modi Government to built a strong economy, involved demonetization and encouragement of digital payments. This was done in order to curb black money. With an objective to promote digital payments in case of small unorganized businesses, the rate of presumptive taxation was reduced from 8% to 6% for the turnover amount earned through cheque/digital mode. Naturally, those doing cash transactions, would not issue bills to customers, going off the income tax radar. If benefits of digital transactions were extended to small businesses, are they not legally and morally obliged to issue bills to customers? Failure to issue bills leads to a failure in curbing black money and a failure of the entire economy.
Claim as deduction or refund
Having an official receipt or bill against the purchases makes it possible for you to validly claim it as an expense. You can use the bill as a deduction to sales, or claim the TDS back from the government. The process of money transaction is smoothened out and allows for an incisive tracking of country’s currency flow.
Completes your business records
From the point of view of a company or a sole proprietor/business, the basic benefit of asking for a bill is the management of official records. Bills support the existence of transactions to show in the accounting books. A customer has the right to refuse payment if no bill is given to him/her. Remember, all records where transactions are stored need to show the bills in order to pay taxes to the Government or claim back if any. Incomplete records will only lead to tax fudging and the Government loses on important revenue. Then the residents of the same country cry foul over no development or poor facilities.
We are sure you have noticed accountants having a tough time during an inspection of books or audit. The auditors give them a run for their life if a particular bill is found missing. Well, if only the company or individual had asked for bills and filed them properly, auditing the books would be a piece of cake. Hence having an efficient invoice solution is much required for all transactions.
Helps you know about taxes charged illegally
In the previous years, VAT or value added tax was a tax structure for goods and not services. Service tax had a separate slab. GST or goods and service tax introduced a uniform tax structure, hence replacing the obsolete practices of VAT and service tax. Asking for a bill would help you know if the seller/retailer/trader is still charging you the above. The bill should mention SGST (State goods and service tax) and CGST (Central goods and service tax) where equal distribution of taxes would go to the state and center respectively. In case you see VAT or sales tax in the bill, it means the seller is overcharging you illegally. Watch out for GST rates at 5%, 12%, 18%, 28% and 28% plus cess for various categories.