A customer pays Rs.100 in the website by payment gateway for its service. The 18% GST charged by website is included in that amount 100. Payment gateway deducts its fee 2% + 18% GST (Rs 2.36). The company receives Rs 97.64 in its bank account. The GST payable by company can be calculated following way: 1st: service value 84.75 and GST 15.25 2nd: service value 82.75 and GST 14.89 1) Which of the above GST calculation is correct? 2) How much GST the company needs to pay? 3) Can GST charged by PG on its fee be claimed under ITC by company? Looking forward to your reply. Thank you.
Taxable value: ₹84.75, GST: ₹15.25 (First method is correct).
GST payable: ₹15.25 before ITC.
ITC on PG fee GST (₹0.36) can be claimed.
Net GST payable after ITC: ₹14.89.
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Dear Sir,
In reference to your query, please note as follows:
1) The 1st calculation is correct, as revenue as well as Output Tax is to be considered on bill basis and not on receipt basis. Further the said deductions are made on account of your inward services and not an adjustment / discount against the sale made.
2) The GST needed to be paid by the company is INR 15.25. However the same will be adjustable to the extent of ITC attributable to your GSTIN and reflecting in your GSTR 2B (including the PG charges as illustrated above). After adjustment of the ITC, remainder needs to be paid in cash.
3) Yes, GST on PG charges can be claimed as ITC by your company, provided the same is reflecting in your GSTR 2B.
Please connect in case any further details are required to be discussed.
Thanks & Regards,
CA Aditya Dhanuka.
https://www.linkedin.com/in/aditya-dhanuka-69824451/
Thanks again for the reply. The payment gateway combines payment received from customers and deposit the total amount later to company account. For ex: payments of Rs.50, Rs.90, Rs. 500 combined and deposited Rs.628 at once to company account. The payment gateway takes 2-3 days to deposit this amount in company account. In a B2C online business where small value transactions are common, the websites often issue a receipt confirmation instead of invoice. In that receipt information about GST isn't mentioned and only mentions total amount paid by customer. 1) Is it required to create invoice for small amounts like Rs. 50, Rs. 90? Is possible to create combine invoice for small amounts and individual invoice for large amount? 2) What should be the date mentioned on invoice: date in which payment received by PG or date in which deposited to company account? 3) Is it fine website issuing receipt to customer mentioning total amount paid and prepareing GST invoice at backend for compliance purpose?
Dear Sir,
In reference to your query, please note as follows:
1) As per section 31(3)(b) of the CGST Act, read with the proviso to rule 46, in case of B2C sales of less than Rs. 200, and the recipient does not demand the invoice, in that case, supplier has the option to issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.
2) The ideal date on the invoice should be the date on which service has been provided and not on receipt date.
3) Yes. It has to be ensured that the tax invoice is available in your records.
Please connect in case any further details are required to be discussed.
Thanks & Regards,
CA Aditya Dhanuka.
https://www.linkedin.com/in/aditya-dhanuka-69824451/
Invoicing for Small B2C Transactions:
As per Section 31(3)(b) of the CGST Act, read with Rule 46, if B2C sales are below ₹200 and the recipient does not request an invoice, the supplier can issue a consolidated tax invoice at the end of the day for all such transactions.
For higher-value transactions or where the customer requests, individual invoices should be issued.
Invoice Date:
The invoice should ideally be dated as per the service completion date (i.e., when the service is provided).
However, if payment is received in advance, GST liability arises at the time of receipt as per Section 13(2) of the CGST Act, meaning the invoice can be dated accordingly.
Receipt vs. GST Invoice:
A simple receipt can be issued to customers at the time of payment, mentioning the total amount paid.
A proper GST-compliant tax invoice must still be maintained in the company’s records to ensure compliance.
For any further discussion, feel free to connect.
Yes, under GST, an invoice is mandatory for every taxable supply, irrespective of the value—even ₹1.
However, in B2C (Business to Consumer) models with small transactions, some relaxations and practical workarounds exist:
You can issue a consolidated tax invoice per day, per rate, for unregistered customers (B2C) under Rule 46(n) of CGST Rules.
You can issue separate tax invoices for large-value transactions (say, > ₹1,000) and group small-value ones together.
For each day, you may issue:
Individual invoice for ₹500+
Consolidated invoice for, say, 50 transactions below ₹100 each
This approach:
Keeps things compliant
Reduces administrative burden
Exception: If a customer asks for a tax invoice, you must issue one, even for ₹50.
Per Section 31 of CGST Act, the invoice date should ideally be the date of receipt of payment, not the date PG transfers it to your account.
Invoice date = date of payment received by payment gateway
Not the date when PG settles the amount in your bank
This ensures correct tax period mapping and avoids mismatch in GSTR-1 and 3B.
Yes, this is acceptable, and in fact, commonly done in e-commerce:
Your website shows a simple payment confirmation (receipt), which is not a tax invoice.
The actual GST invoice is generated and stored in backend for filing purposes.
Ensure:
GST invoice is compliant with Rule 46 (includes GSTIN, invoice number, tax breakup, etc.)
Invoices are maintained sequentially and are part of your books
You don’t send misleading receipts that might be confused with invoices
Thanks
Damini
