In this guide 6 sections
Counter billing picks the wrong GST when the tax type comes from a shop default instead of the customer. A sale to Villupuram crosses a state line and carries IGST. A sale across the road carries CGST and SGST. Fix it by deriving place of supply from the customer record on every bill.
Two shops, same street, different tax
Puducherry is a small territory wrapped around Tamil Nadu. Villupuram and Cuddalore sit a short drive from Nehru Street, and the border runs through lanes, not highways. A delivery van can cross it without anyone noticing.
The tax notices. A buyer inside the territory splits into CGST and SGST. A buyer registered in Tamil Nadu is an inter-state supply and carries IGST. Same goods, same rate of tax in total, different heads on the invoice.
Books and returns follow those heads. Put the sale in the wrong one and the mismatch travels.
How counter billing picks the wrong one
Most billing screens ship with a default. Someone sets “local sale” on day one, because ninety customers in ten are local. After that, every bill is CGST plus SGST unless the clerk remembers to change it.
Clerks do not remember on a busy Saturday. The wholesale buyer from Villupuram gives a GSTIN, the clerk types it into a note field, and the bill still prints with the local split.
The error is invisible on the paper. Both versions show a tax line and a total. Only the place of supply, which the buyer’s state code reveals, would tell you.
- A default sale type set once and never revisited
- GSTIN typed into a remarks box instead of the customer record
- Quick bills raised to “cash” customers who are really registered buyers
- Delivery address in Tamil Nadu but billing address in Puducherry
- Staff changing the tax head by hand under time pressure
What the error does to returns and credit notes
Your sales return lists each invoice with its GSTIN, value and tax heads. If an invoice to a Tamil Nadu buyer shows CGST and SGST, the head is wrong at filing. Your accountant then corrects it by hand, invoice by invoice, at the end of the month.
The buyer feels it too. Input credit sits in a head their system does not expect, and they ask you to reissue. That means a credit note for the old bill and a fresh invoice, with a paper trail you did not plan on.
Credit notes for returned goods repeat the problem. If the original bill carried the wrong head, the note copies it.
Let the customer decide the tax, not the counter
The fix is structural. Store each customer’s GSTIN, state and shipping state once, at creation. When a bill starts, the software reads the customer and compares the supplier state with the place of supply.
Same state means CGST plus SGST. Different state means IGST. The clerk never chooses the head, and an override needs a reason and a name in the log.
Unregistered walk-in buyers need a rule as well. Decide what happens when the customer is unknown and the goods leave on a lorry to Tamil Nadu. A prompt for delivery state is better than a silent default.
Check last month’s bills before you change anything
Export last month’s sales as a sheet. Sort by customer state and filter for any Tamil Nadu GSTIN with CGST or SGST amounts. Count the rows. That count is the size of your problem.
Then send the sheet to your accountant with a short list of the buyers affected. Ask what correction route applies to your case. This is for them to advise on, not for guesswork.
Once the list is clean, fix the customer master first and the billing rule second. Test with one Villupuram buyer and one local buyer before the next billing day.
Place of supply check sheet
One sheet holds a table of eight columns: invoice number, date, customer, GSTIN state code, delivery state, tax head printed, tax head expected and fix needed. Below it sits a short test block with three sample bills: a local buyer, a Tamil Nadu registered buyer and an unregistered walk-in with delivery out of state.
Open a blank worksheet to printQuestions owners ask
Does a buyer’s GSTIN decide whether I charge IGST?
It is a strong signal because the first two digits show the state. Place of supply rules can differ for some goods and services, so confirm unusual cases with your accountant.
What if the customer collects goods from my shop but is registered in Tamil Nadu?
The rules depend on the supply and where it is considered to take place. Do not assume the counter decides. Ask your accountant, then set the rule in the software so every clerk follows it.
Can software correct bills that are already issued?
It can flag them and prepare credit notes and fresh invoices, but the correction route and timing are for your accountant to confirm. The software’s job is a clean list.