📖 Overview
The Invoice Type master is used to configure different types of Sales and Purchase invoices in the software. It defines how taxes are calculated, which ledger account is used, where the invoice type appears, and how the invoice behaves during voucher entry. Navigation : Menu => Setup => Sales Setup/Purchase Setup => Sales/Purchase Invoice Type
Once an Invoice Type is created, it becomes available in the corresponding Sales or Purchase Voucher screen. This allows businesses to maintain different invoice formats such as GST Sales, Tax-Free Sales, Export Sales, Job Work, Capital Goods Purchase, RCM Purchase, etc.
📝 Field Description
📌 Name
Enter the name of the Invoice Type.
This name is displayed in the Sales Invoice and Purchase Invoice screens while selecting the invoice type.
Example:
- GST Sales
- GST Purchase
- Tax Free
- Export Invoice
- Capital Goods Purchase
💼 Sales A/c / Purchase A/c
Select the default Sales Account or Purchase Account for this Invoice Type.
Whenever an invoice is saved using this Invoice Type, the Sales or Purchase amount will automatically be posted into the selected ledger account.
Example:
- Sales GST A/c
- Local Sales A/c
- Purchase GST A/c
- Capital Goods Purchase A/c
For purchasing machinery, furniture, vehicles, or other fixed assets, you can select a Fixed Asset Account instead of a normal Purchase Account.
📄 Form Name
This option was used during the VAT system for selecting statutory forms.
It is currently not used under the GST system and can normally be left blank.
🧾 Tax Master
Select the default Tax Master that should be applied to this Invoice Type.
This is mainly useful when every invoice uses a single tax rate.
Example:
- GST 18%
- GST 12%
- GST 5%
- GST 28%
Recommended: Mostly used in Transport Companies where every freight invoice generally uses a single GST rate.
✅ Is Multi Tax
Enable this option when a single invoice contains multiple products having different GST rates.
The software will calculate GST separately for each item based on its Commodity (HSN).
Example:
| Product | GST |
|---|---|
| Product A | 5% |
| Product B | 12% |
| Product C | 18% |
All three products can be included in one invoice, and the software will calculate tax item-wise automatically.
Recommendation: Trading Companies should enable this option if multiple GST rates are used in one invoice. Transport Companies generally use a single GST rate, so this option is usually not required.
🔒 Fixed Account
When enabled, the selected Sales or Purchase Account becomes fixed.
Users cannot change the ledger account while creating the invoice, ensuring consistent accounting.
📂 Invoice Type For
Controls where this Invoice Type will appear.
| Option | Description |
|---|---|
| Blank / All | Available in all voucher types. |
| Sales | Visible only in Sales Invoice. |
| Purchase | Visible only in Purchase Invoice. |
| Job Work | Visible only in Job Work vouchers. |
| No Voucher | Disables this Invoice Type without deleting it. |
🧮 Tax Calculation
Defines how GST should be calculated.
The default option is Item Wise, where GST is calculated separately for every invoice item.
This is the recommended setting for almost all businesses.
🏷️ Tax Type
Select the taxation method for this Invoice Type.
| Option | Description |
|---|---|
| GST | Normal GST Invoice. |
| IGST | Inter-State GST Invoice. |
| FREE | Tax-Free Invoice. |
| VAT | Old VAT Invoice. |
| Non GST | Non-GST Transactions. |
🔄 RCM / Other
This option is used for creating Reverse Charge Mechanism (RCM) vouchers.
Under RCM, GST is calculated but is not added to the supplier invoice value. Instead, GST is posted separately to GST Liability or Provisional GST accounts.
Example:
- Transport Charges = ₹10,000
- GST = 5% under RCM
- Supplier Invoice Total = ₹10,000
- GST = ₹500 posted separately through RCM Accounting
Select the appropriate RCM option whenever GST is payable under Reverse Charge.
♻️ Reverse Charge
Available options:
- Y = Yes
- N = No
This setting is mainly used by Transport Companies.
The selected value is reflected automatically in GSTR-1 B2B Reports under the Reverse Charge column.
🌍 Export Type
Used for GST Export transactions.
| Option | Description |
|---|---|
| NONE | Normal Domestic Invoice. |
| WOPAY | Export Without Payment of GST. |
| WPAY | Export With Payment of GST. |
| SEZWOP | Supply to SEZ Without Payment. |
| SEZWP | Supply to SEZ With Payment. |
📍 POS Type
Select the applicable Place of Supply (POS) type.
| Option | Description |
|---|---|
| Regular | Normal GST Invoice. |
| POS | Special Place of Supply transaction. |
💡 Best Practices
- ✅ Create separate Invoice Types for different GST rates when required.
- ✅ Enable Multi Tax only if invoices contain products with different GST rates.
- ✅ Use Fixed Account to prevent users from changing ledger accounts.
- ✅ Use RCM Invoice Types only for Reverse Charge transactions.
- ✅ Select the correct Export Type for export and SEZ invoices.
- ✅ Configure Invoice Types once during setup to ensure consistent accounting and GST reporting.
📌 Summary
The Invoice Type Configuration controls how Sales and Purchase invoices behave within the software. It determines the default ledger account, GST calculation method, tax type, invoice visibility, export configuration, and Reverse Charge settings. Proper configuration ensures accurate accounting, automatic GST calculations, correct statutory reporting, and a smooth invoice entry process across the ERP.