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GST, Billing and Accounting Glossary

Short, plain-English definitions of the words you meet on invoices, in GST returns and in your books, each with an example from a real-looking shop and a link to the full explainer where there is one.

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A

Accrual basis
A way of keeping accounts in which income is recorded when it is earned and expenses when they are incurred, not when cash changes hands. A credit sale counts in the month it is invoiced, even if the customer pays later. Companies must keep accounts on the accrual basis, and most accounting software works this way. Example: a ₹12,000 sale to Annapoorna Mess on 28 March counts in March's sales, even though the mess pays in April.
Accumulated depreciation
The total depreciation charged on an asset since it was bought. It is kept in a separate account with a credit balance and shown as a deduction from the asset's cost in the balance sheet, so the original cost stays visible. Example: Sri Lakshmi Stores' fixtures and computer cost ₹2,00,000; after one year, accumulated depreciation is ₹30,000 and the book value ₹1,70,000. Read more
Advance receipt
Money received from a customer before goods or services are supplied. It is a liability until the supply is made. For services, GST is generally payable when the advance is received, and a receipt voucher is issued; for goods, GST on advances is not payable for most taxpayers. Example: a caterer taking ₹10,000 in advance for an event next month issues a receipt voucher and pays GST on the advance.
Ageing report
A report that splits what customers owe, or what you owe suppliers, by how long it has been outstanding, such as 0–30, 31–60, 61–90 and over 90 days. It shows at a glance which udhar needs chasing first. Example: of ₹1,20,000 owed to Sri Lakshmi Stores, ₹6,000 is over 90 days old. Read more
Aggregate turnover
The total value of all taxable, exempt and export supplies made by all registrations under one PAN in India, before GST. It decides GST registration, composition eligibility, QRMP, HSN digits, e-invoicing and whether you file GSTR-9. Example: ₹36 lakh of taxable sales and ₹12 lakh of exempt sales make aggregate turnover of ₹48 lakh. Read more

B

B2B invoice
A tax invoice issued to a buyer registered under GST, carrying the buyer's GSTIN. The buyer can claim input tax credit once the supplier reports the invoice in GSTR-1. B2B invoices are reported one by one. Example: a ₹40,000 sale to a registered hotel, with the hotel's GSTIN on the invoice, is a B2B sale and lets the hotel claim the GST as credit. Read more
B2C invoice
An invoice to a consumer or an unregistered business. B2C sales are reported in GSTR-1 as totals by state and rate, except inter-state invoices above ₹1 lakh, which are reported one by one. Invoices of ₹50,000 or more must carry the buyer's name and delivery address. Example: a ₹1,050 counter bill to a walk-in customer is a B2C sale and joins the month's state-and-rate totals. Read more
Balance sheet
A statement of what a business owns (assets), what it owes (liabilities) and the owner's stake (capital) on one date, usually 31 March. Assets always equal liabilities plus capital. Example: on 31 March 2026, Sri Lakshmi Stores had assets of ₹7,95,000 = liabilities of ₹2,05,000 + capital of ₹5,90,000. Prepare it alongside the profit and loss statement for the year. Read more
Bank reconciliation
Matching the bank balance in your books with the bank statement, and listing the reasons they differ: unpresented cheques, uncleared deposits, bank charges and errors. Done monthly, it catches missing entries early. Example: a book balance of ₹1,60,000, plus an unpresented ₹22,000 cheque, less an uncleared ₹12,000 deposit, equals a statement balance of ₹1,70,000. Read more
Barcode
A machine-readable code printed on a product or label, usually EAN-13 on branded goods or Code 128 on a shop's own labels. Scanning it at the counter picks the right item and price and keeps stock accurate. Example: printing Code 128 labels for loose items packed in the shop lets the cashier scan them like branded goods. Read more
Batch and expiry
The manufacturing batch number and expiry date of a product, mainly medicines and packaged food. Tracking them lets a shop sell the nearest-expiry stock first and stop expired stock from being sold. Example: a pharmacy with two batches of the same syrup, expiring in June and December, sells the June batch first and blocks it after expiry.
Bill of supply
The document a composition taxpayer, or a registered business selling only exempt goods or services, issues instead of a tax invoice. It shows no GST, and the buyer cannot claim input credit on it. Example: a composition kirana's ₹450 bill simply shows ₹450 and the words "composition taxable person, not eligible to collect tax on supplies". Read more
Blocked credit
GST paid on purchases for which input tax credit is not allowed under section 17(5) of the CGST Act, such as most motor vehicles, food and beverages, club memberships and goods for personal use. The GST becomes part of the cost. Example: GST paid on a car for the owner's use or on staff lunches is generally blocked, while GST on stock for resale is not. Read more

C

Capital
The owner's stake in the business: money and assets brought in, plus profits kept in the business, less drawings. In the balance sheet it sits with liabilities, because the business owes it to the owner. Example: Ramesh's capital grew from ₹3,60,000 to ₹5,90,000 in 2025-26: ₹4,70,000 profit less ₹2,40,000 drawings. Read more
Cash book
The book in which all cash and bank receipts and payments are recorded in date order, with running balances. It can have columns for cash, bank and discount. Example: a double-column cash book shows cash and bank side by side, so a cash deposit appears as cash out and bank in on the same line, and the till count can be checked against the cash balance every evening. Read more
Cash memo
A simple bill for a cash sale, usually from a small or unregistered shop. A registered business issuing a cash memo for taxable goods must still meet the tax invoice rules. Example: a registered kirana's printed counter bill with its GSTIN, bill number, items, rates and GST is a tax invoice, whatever it is called. Read more
CGST
Central Goods and Services Tax: the centre's half of GST on a sale within a state. It is always charged with SGST or UTGST at the same rate, for example 9% CGST plus 9% SGST on an 18% item. Example: on a ₹1,000 sale at 18% within Karnataka, CGST is ₹90 and SGST ₹90. Read more
CMP-08
The quarterly statement-cum-challan with which a composition taxpayer declares turnover and pays tax, due by the 18th of the month after each quarter. Example: a composition trader with ₹5,40,000 of taxable turnover in a quarter pays 1%, ₹5,400, with CMP-08. A nil CMP-08 is still filed for a quarter with no sales, and the year's four statements are summarised in GSTR-4. Read more
Composition scheme
An optional GST scheme for small businesses: tax is paid at a low flat rate on turnover, such as 1% for traders, instead of charging GST on each sale. Composition taxpayers cannot collect GST, claim input credit or sell goods to other states. Example: a provision store under composition issues bills of supply and pays 1% of its taxable turnover every quarter. Read more
Contra entry
An entry that moves money between the business's own cash and bank accounts, such as depositing the day's cash. Both sides are in the cash book, and income and expenses are unaffected. Example: depositing ₹35,000 of the day's cash in the bank is entered as cash out and bank in, marked "C" for contra. Read more
Cost of goods sold
What the goods you sold in a period cost you: opening stock plus purchases minus closing stock. Sales minus cost of goods sold is gross profit. Example: opening stock ₹2,70,000 + purchases ₹38,20,000 − closing stock ₹3,30,000 = cost of goods sold of ₹37,60,000 for Sri Lakshmi Stores in 2025-26. A wrong stock count changes this figure, and the profit, rupee for rupee. Read more
Credit limit
The most a customer is allowed to owe at one time. Billing beyond the limit needs the owner's approval. Limits are the simplest way to keep udhar under control. Example: a regular customer with a ₹5,000 limit who already owes ₹4,800 can buy ₹200 more on credit before paying something. Review limits every few months and lower them for customers who pay late. Read more
Credit note
A document issued to a customer to reduce the amount of an earlier invoice, for a sales return, a price reduction or an overcharge. Under GST it reduces the tax on the original invoice and is reported in GSTR-1. Example: a customer returns a ₹500 item bought at 5%; the credit note reverses ₹500 of sales and ₹25 of GST. Read more
Current ratio
Current assets divided by current liabilities. It shows whether the business can pay its bills due within a year from assets that will turn into cash within a year. Example: current assets of ₹6,25,000 against current liabilities of ₹2,05,000 give a current ratio of 3.05. A ratio below 1 means short-term bills exceed the assets that will pay them. Read more

D

Day book
A list of every accounting entry for a day or period in date order: sales, purchases, receipts, payments, expenses and journals. Useful for checking the day's work before closing. Example: Monday's day book lists 180 counter bills, two supplier bills, a rent payment and a cash deposit, in time order, with totals of money in and money out for checking at closing.
Debit and credit
The two sides of every accounting entry. A debit increases assets and expenses; a credit increases liabilities, capital and income. Every entry's debits equal its credits. Example: a cash sale debits Cash (an asset rises) and credits Sales (income rises). Paying the electricity bill debits Electricity and credits Bank, because an expense rises and an asset falls. Read more
Debit note
A document raising the amount of an earlier invoice, or sent to a supplier for a purchase return. Under GST, a supplier issues a debit note to charge more tax; buyers often call their purchase-return note a debit note too. Example: a shop returning ₹2,000 of damaged goods to its distributor sends a debit note, and the purchase and input credit are reduced. Read more
Delivery challan
A document that goes with goods moved without a sale at that moment, such as goods sent for job work, on approval or between branches. It is not a tax invoice. Example: a kirana sending ₹70,000 of stock to its own branch uses a delivery challan, and an e-way bill if the value is over the limit. Read more
Depreciation
The share of a fixed asset's cost charged as an expense each year over its useful life, by straight-line or written-down value. It is not a cash payment. Example: fixtures costing ₹1,50,000 with a 10-year life and no residual value are depreciated at ₹15,000 a year on the straight-line method, and the yearly charge appears in the profit and loss statement. Read more
Double-entry bookkeeping
The system in which every transaction is recorded in at least two accounts with equal debits and credits, so the books can be checked with a trial balance. Example: paying a supplier ₹52,500 reduces the bank balance (credit Bank) and reduces what is owed to the supplier (debit the supplier) by the same amount, so the books stay in balance. Read more
Drawings
Money or goods the owner takes out of the business for personal use. Drawings are not an expense; they reduce the owner's capital in the balance sheet. Example: Ramesh takes ₹20,000 a month for household expenses, ₹2,40,000 a year, debited to Drawings and deducted from his capital, not from profit. Goods taken home from the shop are drawings too. Read more

E

E-invoice
A B2B invoice reported to the government's Invoice Registration Portal, which returns an IRN and a signed QR code to be printed on the invoice. Compulsory for businesses whose aggregate turnover has exceeded ₹5 crore in any year since 2017-18. Read more
E-way bill
An electronic document generated on the e-way bill portal before goods worth more than ₹50,000 are moved, carrying the invoice and vehicle details. States set their own limits for movement within the state. Example: sending ₹70,000 of goods from Mysuru to Ooty in Tamil Nadu needs an e-way bill, because inter-state consignments over ₹50,000 always do. Read more
Exempt supply
A supply on which no GST is charged because it is nil-rated, wholly exempt by notification, or outside GST. Examples include fresh vegetables and unbranded cereals. Input credit linked to exempt supplies is not allowed. Example: a kirana selling ₹1,00,000 of loose rice and vegetables in a month makes exempt supplies, reports them in GSTR-1 table 8, and reverses the matching share of credit on common costs. Read more

F

FIFO
First-in, first-out: a way of valuing stock that assumes the oldest units are sold first, so closing stock carries the latest purchase prices. Allowed under AS 2, as is weighted average; LIFO is not. Example: with oil bought at ₹130, ₹140 and ₹150 a pouch, FIFO values the last 100 pouches left at ₹150 each. Read more
Financial year
The accounting and tax year in India, running from 1 April to 31 March. Invoice numbers must be unique within a financial year, and most businesses restart their series each April. Example: the financial year 2025-26 ran from 1 April 2025 to 31 March 2026, and a new invoice series such as SLS/26-27/0001 started on 1 April 2026. Read more
Fixed assets
Assets bought to use in the business for more than a year, such as furniture, fridges, computers and vehicles. They are recorded at cost and depreciated over their life. Example: Sri Lakshmi Stores' shelving, counter, fridge and billing computer are fixed assets; the rice and oil on the shelves are stock. Fixed assets appear in the balance sheet at cost less accumulated depreciation. Read more
FSSAI licence
The registration or licence every food business needs from the Food Safety and Standards Authority of India. From 1 April 2026, registration covers turnover up to ₹1.5 crore, a state licence up to ₹50 crore and a central licence above that. The number goes on bills. Example: a café with turnover of ₹80 lakh needs FSSAI registration, not a state licence, under the thresholds in force from April 2026. Read more

G

Golden rules of accounting
The traditional rules for debit and credit: for personal accounts debit the receiver and credit the giver; for real accounts debit what comes in and credit what goes out; for nominal accounts debit expenses and losses and credit incomes and gains. Example: paying rent by bank: Rent is nominal, so debit it; the bank is personal and gives, so credit it. Read more
Gross profit
Sales minus the cost of goods sold. Gross profit margin is gross profit as a percentage of sales, and shows whether buying and pricing are working. Example: sales of ₹48,00,000 less cost of goods sold of ₹37,60,000 give a gross profit of ₹10,40,000, a gross margin of 21.67%. A fall in this margin points to buying, pricing or stock losses. Read more
GST
Goods and Services Tax: India's tax on the supply of goods and services since July 2017, collected at each stage with credit for tax paid on inputs. The main slabs since 22 September 2025 are nil, 5%, 18% and 40%. Example: on a ₹100 packet of biscuits at 5%, the customer pays ₹105; the shop pays the ₹5 to the government after deducting GST it paid to its supplier. Read more
GST rate slabs
The rates at which GST is charged. Since 22 September 2025 the main slabs are 5% and 18%, with nil for essentials and 40% for a short list of luxury and sin goods; a few items such as precious metals have special rates. Example: soap and biscuits are now at 5%, mobile phones and cement at 18%, and aerated drinks at 40%. Read more
GSTIN
The 15-character GST identification number given on registration: two digits of state code, the PAN, an entity number, the letter Z and a check character. Example: a GSTIN beginning 29 belongs to a registration in Karnataka; one beginning 33 to Tamil Nadu. The middle ten characters are the business's PAN, so all registrations of one business share them. Read more
GSTR-1
The return of outward supplies: B2B invoices one by one, B2C sales as totals, the HSN summary and documents issued. Due by the 11th of the next month, or the 13th after the quarter for QRMP filers. Example: a monthly filer's GSTR-1 for November 2026 is due on 11 December 2026. Read more
GSTR-2B
A fixed monthly statement on the GST portal showing the input tax credit available from invoices your suppliers reported. It is generated on the 14th of the next month and is the basis for the credit claimed in GSTR-3B. Example: if 40 of 42 purchase bills appear in GSTR-2B, credit is claimed on the 40 and the other two are chased with the supplier. Read more
GSTR-3B
The summary return in which tax is declared and paid: outward tax, input credit and the net payable. Due by the 20th of the next month, or the 22nd or 24th after the quarter for QRMP filers. Example: a monthly filer's GSTR-3B for November 2026 is due on 20 December 2026, with the tax paid at the same time. Read more
GSTR-4
The annual return of a composition taxpayer, due by 30 June after the financial year from 2024-25 onwards. Example: a composition trader files GSTR-4 for 2026-27 by 30 June 2027, summarising the turnover and tax already paid through the year's four CMP-08 statements and listing its purchases. A late GSTR-4 attracts a late fee of up to ₹2,000. Read more
GSTR-9
The annual return of a regular taxpayer, due by 31 December after the financial year. Businesses with aggregate turnover up to ₹2 crore are exempt from 2024-25 onwards. Example: a wholesaler with ₹3.2 crore turnover files GSTR-9 for 2025-26 by 31 December 2026; a kirana with ₹48 lakh does not have to. GSTR-9 cannot be revised after filing, so differences are settled first. Read more

H

HSN code
Harmonised System of Nomenclature: the code that classifies goods. Tax invoices carry 4 digits if aggregate turnover is up to ₹5 crore (optional on B2C) and 6 digits above that. Example: mobile phones fall under HSN 8517 and footwear under chapter 64. A shop with turnover under ₹5 crore prints at least the first four digits on B2B invoices. Read more

I

IFF
Invoice Furnishing Facility: an optional way for QRMP filers to upload B2B invoices for the first two months of a quarter, between the 1st and 13th of the next month, so buyers get credit sooner. Example: a QRMP kirana uploads October's invoices to two registered hotels through IFF by 13 November, so the hotels can claim credit for October. Read more
IGST
Integrated GST: the tax charged on supplies from one state to another, and on imports, at the full rate. It is collected by the centre and shared with the destination state. Example: a ₹10,000 sale at 18% from Mysuru to a buyer in Coimbatore carries IGST of ₹1,800, instead of ₹900 CGST and ₹900 SGST. The place of supply decides which applies. Read more
IMS
Invoice Management System: the GST portal facility where a buyer can accept, reject or keep pending each invoice its suppliers reported, before GSTR-2B is generated. Records with no action are treated as accepted. Example: a buyer rejects in IMS an invoice from a supplier it never bought from, so the wrong credit does not flow into its GSTR-2B. Read more
Input tax credit
GST paid on purchases for business that can be set off against GST collected on sales, so tax is paid only on the value added. Conditions include a valid invoice, receipt of goods and the invoice appearing in GSTR-2B. Example: a shop that collected ₹50,000 of GST on sales and paid ₹26,000 on purchases appearing in GSTR-2B pays ₹24,000 in cash. Read more
Inventory valuation
Putting a value on closing stock, at the lower of cost and net realisable value, using FIFO or weighted average cost. It decides the cost of goods sold and so the profit. Example: 100 pouches of oil valued at ₹15,000 under FIFO and ₹14,000 under weighted average; damaged pouches are written down to what they will sell for. Read more
Invoice number
The serial number of a tax invoice: consecutive, up to 16 characters, using letters, numbers, hyphen and slash, and unique for the financial year. Several series are allowed. Example: SLS/26-27/0001 is 14 characters long and valid; "SriLakshmiStores/26-27/0001" is 27 and too long. Cancelled numbers are kept marked as cancelled, never reused. Read more

J

Journal entry
A record of one transaction in the journal, showing the accounts debited and credited, the amounts and a narration. Debits always equal credits. Example: depreciation for the year is recorded as "Depreciation A/c Dr ₹30,000, To Accumulated depreciation A/c ₹30,000", with the narration "being depreciation for 2025-26". Corrections are made with a new entry, never by erasing. Read more

K

KOT
Kitchen Order Ticket: the slip or screen order sent from the restaurant floor to the kitchen when items are ordered, before the bill is printed. Example: a waiter takes a table's order of two dosas and a coffee; the KOT goes to the kitchen and the coffee counter, and the bill is printed when the table asks for it. Voided items after a KOT need a reason. Read more

L

Late fee
A per-day charge for filing a GST return after its due date, payable in cash: ₹50 a day for GSTR-1 and GSTR-3B (₹20 for nil returns), with caps that depend on turnover. Example: a GSTR-3B filed 15 days late by a shop with turnover under ₹1.5 crore costs 15 × ₹50 = ₹750, plus interest on any tax paid late. Read more
Ledger
The book of accounts, with one account for each customer, supplier, asset, liability, income and expense, showing every entry and the running balance. Example: the ledger account for Sri Ganesh Agencies lists every purchase bill (credits), every payment made (debits) and the balance owed, which was ₹95,000 on 31 March 2026. Customer ledgers work the same way in reverse. Read more
LUT
Letter of Undertaking: filed on the GST portal by an exporter, usually once a year, to export goods or services without paying IGST and then claim a refund of unused input credit. Example: a handicrafts seller exporting to Dubai files an LUT for the year and ships without charging IGST, then claims a refund of the credit it could not use. Read more

M

Margin
Profit as a percentage of the selling price. An item bought at ₹80 and sold at ₹100 has a 20% margin. Example: an item bought at ₹80 and sold at ₹100 earns ₹20, a 20% margin on the selling price. Margin is what a profit and loss statement shows, so set prices with the margin you need in mind. Read more
Margin scheme
A GST valuation rule for dealers in second-hand goods who claim no input credit on them: tax is paid only on the difference between selling and purchase price, and a negative margin is ignored. Example: a used phone bought from a customer for ₹8,000 and sold for ₹9,770 carries GST only on the ₹1,770 margin: ₹270 at 18%. Read more
Markup
Profit as a percentage of cost. An item bought at ₹80 and sold at ₹100 has a 25% markup, though its margin is 20%. Example: a shop that wants a 20% margin must mark up cost by 25%: ₹80 × 1.25 = ₹100. Adding 20% to cost gives only ₹96 and a margin of about 16.7%, a common pricing mistake. Read more
MRP
Maximum retail price: the highest price, inclusive of all taxes, at which a packaged product may be sold, printed under the Legal Metrology rules. A shop may sell below MRP; GST is worked out on the actual price. Example: a strip with an MRP of ₹105 inclusive of 5% GST can be sold for ₹100; GST is then on the lower price.

N

Net profit
What remains after deducting all expenses, including rent, salaries and depreciation, from gross profit. Net profit margin is net profit as a percentage of sales. Example: gross profit of ₹10,40,000 less expenses of ₹5,70,000 leaves Sri Lakshmi Stores a net profit of ₹4,70,000, 9.79% of sales. Drawings are not deducted to arrive at it; they come out of capital. Read more
Net realisable value
The expected selling price of stock less the costs needed to sell it. Stock is valued at the lower of cost and net realisable value, so damaged or expired goods are written down. Example: ten damaged pouches that cost ₹150 each but will sell for only ₹100 are valued at ₹100 each, a write-down of ₹500. Read more
Nil-rated supply
Goods or services carrying a 0% rate in the GST rate schedule. No tax is charged, and input credit related to them must be reversed, as for exempt supplies. Example: since 22 September 2025, exercise books, pencils and UHT milk are nil-rated. A shop selling them issues a bill of supply, or an invoice-cum-bill of supply for a mixed bill. Read more

O

Opening balance
The balance of an account at the start of a period, brought forward from the previous period's closing balance. When moving to new software, opening balances are entered once, usually as of 1 April. Example: Sri Lakshmi Stores began 2026-27 with opening balances of capital ₹5,90,000, stock ₹3,30,000 and bank ₹1,60,000, carried from its 31 March 2026 balance sheet. Read more

P

Place of supply
Where a supply is treated as made for GST. If it is in the supplier's state, CGST and SGST apply; if in another state, IGST. For goods it is usually where delivery ends. Example: goods sold at the Mysuru counter to a visitor from Kerala have a Karnataka place of supply; goods couriered to Kerala do not. Read more
PMT-06
The challan used by QRMP filers to pay tax for the first two months of each quarter, by the 25th of the next month, by the fixed-sum or self-assessment method. Example: a QRMP filer that paid ₹72,000 of cash tax last quarter pays 35%, ₹25,200, by the 25th for each of the first two months under the fixed-sum method. Read more
Profit and loss statement
A statement of income and expenses for a period, showing gross profit and net profit or loss. Also called the income statement or P&L. Example: Sri Lakshmi Stores' P&L for 2025-26 shows sales of ₹48,00,000, gross profit of ₹10,40,000 and net profit of ₹4,70,000. GST collected and drawings do not appear in it. Read more
Proforma invoice
A preliminary bill sent before a sale to show the buyer what they will be charged. It is not a tax invoice, carries no tax liability and is not recorded in the books as a sale. Example: a distributor sends a school a proforma invoice for 500 notebooks so the school can approve the purchase; the tax invoice follows when the goods are supplied. Read more
Purchase order
A document a buyer sends a supplier to order goods at agreed prices and terms. It becomes a commitment once accepted but is not an accounting entry. Example: a kirana sends its oil distributor a purchase order for 20 cases at the agreed rate, and checks the supplier bill against it when the goods arrive. Any shortage or rate difference is raised before the bill is paid. Read more

Q

QRMP scheme
Quarterly Return Monthly Payment: an option for businesses with aggregate turnover up to ₹5 crore to file GSTR-1 and GSTR-3B quarterly while paying tax monthly through PMT-06. Example: a Karnataka shop with ₹48 lakh turnover under QRMP files four GSTR-1 and four GSTR-3B returns a year, the 3B by the 22nd after each quarter. Read more
Quotation
An offer to a customer listing goods or services, prices and terms, valid for a stated time. Once accepted it can be turned into a sale order or invoice. Example: a hardware store quotes a builder for 200 bags of cement and fittings, valid for seven days; when the builder accepts, the quotation becomes an invoice at the quoted rates. A quotation is not entered in the books. Read more

R

Reverse charge
A mechanism under which the buyer, not the seller, pays GST on notified goods and services, such as goods transport by a GTA, legal services by an advocate and commercial rent from an unregistered owner. Example: a registered shop paying ₹20,000 monthly rent to an unregistered owner pays ₹3,600 GST itself under reverse charge and claims it back as credit. Read more
Round off
The small adjustment, usually less than a rupee, that brings a bill total to a whole rupee. It is recorded in a round-off account so the books still balance. Example: a bill of ₹8,919.95 is rounded to ₹8,920, and the five paise go to the round-off account. Over a month these amounts are small, but they must be recorded for the books to balance.

S

SAC code
Service Accounting Code: the six-digit code, starting with 99, that classifies services on GST invoices. Example: repair and maintenance services fall under SAC group 9987, and restaurant and accommodation services under 9963. A repair shop prints the SAC on the labour line and the HSN on each spare part, so one invoice can carry both kinds of code. Read more
SGST
State Goods and Services Tax: the state's half of GST on a sale within the state, charged with CGST at the same rate. Example: on a ₹5,000 sale at 5% within the state, SGST is ₹125 and CGST ₹125. SGST credit can be used against SGST and IGST liability, not against CGST. In union territories without a legislature, UTGST takes its place. Read more
State code
The two-digit GST code of a state or union territory, such as 29 for Karnataka and 33 for Tamil Nadu. It is the first two digits of every GSTIN and is printed with the place of supply. Example: Andhra Pradesh now uses 37; 28 was its code before 2014. Read more
Stock-taking
Physically counting the goods in the shop and comparing the count with the stock records, to find shortages, damage and errors. Done at least at year end. Example: on 31 March Sri Lakshmi Stores counted closing stock worth ₹3,30,000 at cost. Differences between the count and the system are investigated and adjusted with a reason. Read more
Sundry creditors
Suppliers the business owes for goods or services bought on credit. Shown in the balance sheet as trade payables under current liabilities. Example: Sri Lakshmi Stores owed suppliers ₹1,80,000 on 31 March 2026, including ₹95,000 to Sri Ganesh Agencies. Against purchases of ₹38,20,000, that is about 17 days of credit. Read more
Sundry debtors
Customers who owe the business money for goods or services sold on credit. Shown in the balance sheet as trade receivables under current assets. Example: Sri Lakshmi Stores' debtors on 31 March 2026 were ₹1,20,000, led by Annapoorna Mess at ₹48,000. With ₹8,00,000 of credit sales a year, customers took about 55 days to pay. Read more
Suspense account
A temporary account for amounts that cannot be classified yet, or for a difference in the trial balance while the error is found. It should be cleared to the right account as soon as possible. Example: a ₹3,250 UPI credit with no name is parked in suspense until the customer is identified. Read more

T

Tax invoice
The invoice a registered business issues for a taxable supply, with the fields prescribed in rule 46 of the CGST Rules, including GSTINs, HSN or SAC, taxable value, tax rates and amounts, and place of supply. Example: a registered shop's bill to a hotel showing both GSTINs, HSN codes, ₹40,000 taxable value and ₹1,000 each of CGST and SGST is a tax invoice. Read more
TCS under GST
Tax collected at source by e-commerce operators from the payments they pass on to sellers for supplies made through their platforms. Sellers see it in their electronic cash ledger and can use it to pay tax. Example: a seller on an online marketplace sees the TCS deducted on its sales in its GST cash ledger and uses it against tax due.
TDS under GST
Tax deducted at source under GST by government departments and certain notified bodies from payments to suppliers above a contract value. The supplier claims it in the electronic cash ledger. Example: a stationery supplier to a government school under a large contract receives the payment net of GST TDS and sees the deduction credited in its cash ledger after the deductor files its return.
Trial balance
A list of all ledger accounts with their debit or credit balances on a date. If the totals agree, the double entry is arithmetically correct, though some errors can still hide in it. Example: Sri Lakshmi Stores' trial balance at 31 March 2026 totals ₹53,95,000 on both sides. Read more

U

Udhar
Credit given to a customer to pay later, common in Indian shops. In accounts it is a sundry debtor balance, and it should have a credit limit and a payment date. Example: a regular customer who buys monthly groceries on udhar and pays on the 5th of each month is a sundry debtor between those dates. Sending a statement before the 5th makes the payment date easy to keep. Read more
UPI QR code
A QR code a customer scans to pay the shop by UPI. A dynamic QR printed on the bill carries the exact amount, which makes matching payments easier. Example: a counter bill of ₹1,260 with a dynamic UPI QR printed at the bottom lets the customer pay exactly ₹1,260, and the payment reference matches the bill. Read more
UTGST
Union Territory GST: charged with CGST on supplies within union territories without a legislature, such as Chandigarh and Ladakh, in place of SGST. Example: a sale within Chandigarh at 18% carries 9% CGST and 9% UTGST. Delhi, Puducherry and Jammu and Kashmir have legislatures and charge SGST instead. Read more

W

Working capital
Current assets minus current liabilities: the money tied up in stock and customer credit, less supplier credit. A profitable shop can still run short of it. Example: Sri Lakshmi Stores' current assets of ₹6,25,000 less current liabilities of ₹2,05,000 give working capital of ₹4,20,000. Faster collection of udhar would free part of it. Read more

Y

Year-end closing
Closing the books at 31 March: counting stock, reconciling bank and parties, recording depreciation and other adjustments, working out the profit and carrying balances forward. Example: Sri Lakshmi Stores counted stock, reconciled its bank, posted ₹30,000 of depreciation, found a net profit of ₹4,70,000 and carried capital of ₹5,90,000 into 2026-27, then locked the old year. Read more

Z

Zero-rated supply
Exports and supplies to SEZ units and developers. They are taxable at 0%, input credit is allowed, and unused credit or IGST paid can be refunded. Example: a manufacturer selling to an SEZ unit charges no IGST under LUT and can claim a refund of input credit on that supply. Read more

Last reviewed

Last reviewed: November 2026. Tax terms follow the GST explainers on this site, which list the notifications they were checked against. General information, not tax or accounting advice.

Frequently asked questions

What is the difference between CGST, SGST and IGST?

CGST and SGST are charged together, half each, on sales within a state. IGST is charged at the full rate on sales to another state.

What is the difference between margin and markup?

Margin is profit as a share of the selling price; markup is profit as a share of cost. A 20% margin needs a 25% markup.

What is the difference between a tax invoice and a bill of supply?

A tax invoice charges GST and lets a registered buyer claim credit; a bill of supply, issued by composition dealers and sellers of exempt goods, carries no GST.

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