GST Cash Invoice Limit

No Limit for GST Cash Invoice

There is no limit prescribed for Issue of Cash Invoice under GST Act . Thus Tax Invoice / Bill of supply can be issued under GST for any Value but one has to keep in mind the Provisions of Income Tax Act of India.

Cash receipt of Rs 2 Lakh or more not allowed under Income Tax Act

As per Section 269 ST of Income Tax Act. No person can receive cash of Rs 2 Lakh or more

i) in aggregate from a person in a day,

ii) in respect of singe transaction ( i.e we can assume one invoice under GST is single transaction)

iii) in respect of transactions relating to one event or occasion from a person

If a person receive cash of Rs 2 Lakh Rs or more in contravention of Section 269ST of Income Tax Act  than he may be liable of penalty under section 271DA equal to the amount of such receipt .

Section 269ST of Income Tax Act is reproduced as follow :-

[Mode of undertaking transactions.

269ST. No person shall receive an amount of two lakh rupees or more—

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Provided that the provisions of this section shall not apply to—

Explanation.—For the purposes of this section,—

Penalty for failure to comply with provisions of section 269ST.

271DA. (1) If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt:

Provided that no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention.

(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner. ]

Read detailed analysis of Section 269ST :

i) Cash Receipt Rs 2 Lakh or more Banned w.e.f 01.04.2017

ii)  List of Persons who can receive Cash Payment of Rs 2 Lakh or more – 269ST : CBDT Notification No. 57 /2017/F. No. 370142/10/2017-TPL 3rd July, 2017

iii) CBDT has clarified vide Circular No. 22 of 2017 [ Income Tax ] Dated 03rd July, 2017 that  receipt in the nature of repayment of loan by NBFCs or HFCs, the receipt of one instalment of loan repayment in respect of a loan shall
constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the instalments paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST.

Cash Payments of more than Rs 10000 Dis allowed under Income Tax Act

Section 40A(3) of Income Tax Act :- 

Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, 1[exceeds twenty thousand rupees,] no deduction shall be allowed in respect of such expenditure.

Note 1 . Words “or use of electronic clearing system through a bank account, exceeds ten thousand rupees,” shall be substituted for “exceeds twenty thousand rupees,” by the Finance Act, 2017, w.e.f. 1-4-2018.

Related Topic on GST