Invoices are very important in business activities, they help a business to record their transactions and act as evidence for past activities. Above all, it helps a business see their progress in sales. Two main types of invoices are ta and retail invoices. So, In this article, you’ll learn if you should use an Invoice or tax invoice.

An invoice that is issued from a registered business vendor to another during the sale of goods or services is a Tax invoice. The person who buys the product or service is the end-user.

On the other hand, a document issued from a business vendor to the end consumer during a sale is a retail invoice. These are important invoices because they request customers to make payments for the product or service provided. Also informs the buyers with other details like the item purchased, total amount, and due date.
So what is the difference between Invoice and tax invoices?

Related: The difference between an Invoice and a Bill

Invoice or Tax invoice

Definition

An invoice is issued from a buyer to a seller that includes some information like the amount due to the product or service provided. A tax invoice is a document legally recognized, by a government authority. Therefore tax invoices are issued by the authorized dealer to the purchaser.

Contents

Invoices and tax invoices contain similar information, but the tax invoice has some additional information.
An invoice includes information like:

  • Date of invoice
  • An Invoice ID
  • Details of the buyer
  • Details of the seller
  • Price per item
  • Total Price etc.
Invoice or Tax invoice

Tax Invoices includes:

  • Date of invoice
  • Invoice ID
  • Details of the buyer and the seller
  • Relevant Tax identification number
  • Description of items
  • Price per item
  • GST charged on each item
  • Amount of tax charged etc
Invoice or Tax invoice

Preparation

An invoice is issued in duplicate one for the buyer and one for the seller for the record. The tax invoice on the other hand is prepared on Triplicate. For instance one copy for the buyer, one for the seller, and one for the government authority.

Receiver

An invoice is sent to the end consumer. On the other hand, a tax invoice is issued to another business or company for goods that will be resold or for manufacturing processes.

Requirements

When issuing tax invoices, the giver and recipient must be registered and authorized dealers. While regular invoices require the seller to be a registered business.

Conclusion

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