remedy for non billed purchases
This query is : Resolved
24 October 2016
Sir...my frnd wants to set an online grocery business...but there are so many vendors who don't give bills to save tax on that items...but he wants to do business with a proper way...so he wants bill...& if d vendors give him bill..the rate of products increases...so when it comes to customer they prefer to buy non billed one as it z cheaper...so what z d treatment for ds...I mean how my frnd get both bills & customers in most cost effective way...pls reply sir
24 October 2016
This is a Catch22. What is the expected annual turnover of the business?
24 October 2016
Around 8 - 10 lakhs....
24 October 2016
It is actually a very small amount that will attract taxmen for any wrong doing. Having said that, we always keep records being the dutiful citizens and tax-payers. Please ask your friend to get at least petty cash vouchers signed while paying this money as a proof of payment. I dont think anyone would object to that as everyone wants to keep proof of payment to avoid future disputes. Hope these are small values as PAN is mandatory for payments above 50K
26 October 2016
sir...if business has a turnover of more than 50 lakhs...
26 October 2016
That is not a small amount.
26 October 2016
yes sir.... exactly...what should we do if we can't get taxable bills as d vendors want to minimise price by not including tax on d price....so what should we do in such case....
21 July 2025
This is a common challenge, especially in sectors with price-sensitive customers and vendors reluctant to issue proper bills because of tax concerns. Here’s a breakdown of how your friend can handle it legally and practically:
1. Maintain Compliance and Records
Always insist on proper bills/invoices from vendors, even if the cost is slightly higher.
If vendors refuse, avoid dealing with them because accepting unbilled purchases invites tax risks (e.g., disallowance of expenses, penalties).
2. Negotiate Transparent Pricing
Explain to vendors that having bills protects both parties and can lead to better business relations in the long term.
Some vendors might offer discounts or credit terms if you commit to regular purchases with bills.
3. Pricing Strategy for Customers
Make your friend’s business a trusted brand by emphasizing quality, authenticity, and tax compliance.
Educate customers on the benefits of buying from a legitimate source (e.g., product warranty, quality assurance, GST credits if applicable).
If possible, offer value-added services (delivery, offers, loyalty programs) to justify slightly higher prices.
4. GST Registration and Input Tax Credit (if applicable)
If the business turnover exceeds ₹40 lakhs (₹20 lakhs in some states), GST registration is mandatory.
By purchasing with proper GST invoices, your friend can claim input tax credit and reduce overall tax burden.
This can allow more competitive pricing despite higher billed costs.
5. Handling Non-Billed Purchases (if unavoidable)
Document all payments with receipts, payment proofs, and signed vouchers.
Maintain a payment ledger with detailed entries.
Be cautious: non-billed purchases increase the risk of tax scrutiny and may lead to disallowance of expenses.
6. Alternative Vendors
Look for vendors who comply with tax laws.
Explore wholesalers or authorized distributors who provide proper bills.
Summary:
While non-billed purchases might save upfront costs, they increase risk of penalties and tax issues. The best remedy is to:
Deal only with vendors issuing proper bills
Use GST input credit to optimize costs
Educate customers on benefits of buying with bills
Build a brand focused on trust and compliance
1. Maintain Compliance and Records
Always insist on proper bills/invoices from vendors, even if the cost is slightly higher.
If vendors refuse, avoid dealing with them because accepting unbilled purchases invites tax risks (e.g., disallowance of expenses, penalties).
2. Negotiate Transparent Pricing
Explain to vendors that having bills protects both parties and can lead to better business relations in the long term.
Some vendors might offer discounts or credit terms if you commit to regular purchases with bills.
3. Pricing Strategy for Customers
Make your friend’s business a trusted brand by emphasizing quality, authenticity, and tax compliance.
Educate customers on the benefits of buying from a legitimate source (e.g., product warranty, quality assurance, GST credits if applicable).
If possible, offer value-added services (delivery, offers, loyalty programs) to justify slightly higher prices.
4. GST Registration and Input Tax Credit (if applicable)
If the business turnover exceeds ₹40 lakhs (₹20 lakhs in some states), GST registration is mandatory.
By purchasing with proper GST invoices, your friend can claim input tax credit and reduce overall tax burden.
This can allow more competitive pricing despite higher billed costs.
5. Handling Non-Billed Purchases (if unavoidable)
Document all payments with receipts, payment proofs, and signed vouchers.
Maintain a payment ledger with detailed entries.
Be cautious: non-billed purchases increase the risk of tax scrutiny and may lead to disallowance of expenses.
6. Alternative Vendors
Look for vendors who comply with tax laws.
Explore wholesalers or authorized distributors who provide proper bills.
Summary:
While non-billed purchases might save upfront costs, they increase risk of penalties and tax issues. The best remedy is to:
Deal only with vendors issuing proper bills
Use GST input credit to optimize costs
Educate customers on benefits of buying with bills
Build a brand focused on trust and compliance
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