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Invoice vs receipt: what is the difference?
Both papers carry an amount and a date. They do different jobs. One asks for money. The other proves money arrived. Here is how to tell them apart.
What is the difference between an invoice and a receipt?
An invoice is issued by a seller to ask a buyer for payment for goods or services supplied. A receipt is issued after the money arrives, to confirm that it was paid. The invoice comes first. The receipt closes the sale and proves the payment was made.
Think of the invoice as the request. Think of the receipt as the answer.
A sale paid on the spot can use one paper for both jobs. Many shop bills do exactly that.
What does an invoice do?
An invoice records what was sold, to whom, for how much, and what tax was charged. Under GST, Section 31 of the CGST Act requires a registered person supplying taxable goods or services to issue a tax invoice showing the description, value and tax charged.
The buyer keeps it as proof of the purchase and of the tax charged.
It matters even before payment. It is the record of what the buyer owes.
What does a receipt do?
A receipt confirms that a payment was received. It shows the amount, the date, who paid, and usually how they paid. It does not list the goods in detail. Its job is to settle the question of whether the buyer has paid, and when.
A buyer who pays in parts gets a receipt for each part.
A seller keeps a copy too. It helps when a buyer later says they already paid.
What is a receipt voucher under GST?
A receipt voucher is a document a registered person must issue on receiving an advance payment for a supply. Section 31(3)(d) of the CGST Act requires it, with the prescribed particulars, as evidence that the payment was received before the supply.
So some receipts are not just a courtesy. They are a legal document.
If no supply follows, Section 31(3)(e) lets the seller issue a refund voucher against that payment.
We do not list the prescribed particulars here. Your CA can confirm them.
Which one do I need for a sale?
It depends on when the money arrives. Pay later: issue the invoice first and a receipt when paid. Pay in full at the counter: one bill can serve both. Pay in advance: a registered seller issues a receipt voucher, then the invoice at supply.
Here is a simple way to choose. These are illustrations, not real customers.
Which paper for which sale
- Goods sold on credit: invoice now, receipt when paid.
- Goods paid for in cash at the counter: one bill that shows the payment.
- Advance taken for an order: receipt voucher now, invoice at delivery.
- Order cancelled after an advance: ask your CA about a refund voucher.
Can a receipt replace an invoice?
No, where the law requires a tax invoice. A receipt proves payment but may not carry the description, value and tax charged that Section 31 asks for. A registered buyer who needs proof of the tax paid should be given a proper tax invoice.
Sending only a receipt can leave your buyer short.
Their accountant will ask for the invoice.
Does Invoice Saathi make receipt vouchers?
Invoice Saathi prints tax invoices and bills of supply. It does not produce a receipt voucher or a refund voucher under Section 31. For advance payments, ask your CA how to record the voucher. The app does not decide that for you.
We would rather say so than let you find out at tax time.
Sources
Checked on 26 October 2026. Rules change, so confirm anything that affects your filing with your CA.
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