Can a company verify bills submitted by service vendors, and what are the legal requirements for receipts and GST compliance?
This page explains an employer's or business's right to verify invoices and bills submitted by vendors for reimbursement or payment, and clarifies the legal requirements for receipts, GST registration, and documentation that service providers must follow.
This touches two distinct areas: a company's internal due-diligence rights and GST compliance obligations of vendors. Here is guidance on both.
1. Can a company verify bill amounts with vendors like logistics providers?
Yes, and this is completely standard corporate due-diligence practice. There is no law that prevents a company from contacting a vendor to confirm whether a specific consignment/job was completed and at what price. In practice:
- Call the vendor's corporate/enterprise desk with the receipt number, date, and pickup/drop pin codes. Most large logistics companies have a corporate accounts team that can confirm whether a shipment was booked under that invoice number.
- Request the vendor's GSTIN-linked invoice — if the vendor is GST-registered (see below), a proper tax invoice will have a unique invoice serial number that is reported in their GSTR-1. A GSTIN can be cross-checked at gstin.gov.in.
- Ask for the AWB (Air Waybill) / consignment tracking number along with the receipt — tracking numbers are independently verifiable online and cannot be fabricated.
For a finance team, the most practical policy is to require: (a) a proper GST tax invoice with GSTIN, (b) the consignment/tracking number, and (c) proof of delivery (POD). This makes forgery very difficult.
2. Is it legal for service providers to issue non-GST handwritten bills?
This depends on whether the vendor is GST-registered or not.
If they are GST-registered: They are legally required to issue a proper tax invoice for every taxable supply, regardless of whether the customer asks for it or not. Under CGST Rules Rule 48, the invoice shall be prepared in triplicate for goods (original for recipient, duplicate for transporter, triplicate for supplier) and in duplicate for services (original for recipient, duplicate for supplier). Choosing to issue a handwritten receipt instead of a GST invoice to avoid disclosure is a GST evasion offence under CGST Act §122.
If they are NOT GST-registered (i.e., annual turnover below ₹20 lakh for services, or ₹40 lakh for goods): They are not required to charge or collect GST. A handwritten receipt from such a vendor is legally valid. However, a company cannot claim ITC (Input Tax Credit) on such receipts, which is typically not an issue for employee reimbursements.
A common pattern: Many small service providers operate partially or fully outside the GST net — either legitimately (below threshold) or by suppressing turnover. Issuing a GST invoice "only when asked" is a red flag for the latter. If a registered vendor is routinely suppressing turnover, this can be reported to CBIC's GST Evasion hotline: 1800-103-4786 or via a complaint at cbic-gst.gov.in.
3. What a Finance team can do for tighter due-diligence
| Step | What to check | How |
|---|---|---|
| GSTIN Verify | Is the GSTIN on the bill real and active? | services.gst.gov.in/services/searchtp |
| Invoice authenticity | Is this invoice number in the vendor's GSTR-1? | Ask vendor for e-Invoice / IRN (Invoice Reference Number) if they're >₹5Cr turnover |
| Shipment exists | Did this consignment actually move? | Cross-check tracking/AWB number on the courier's website |
| Amount match | Does the price match published rates? | Request vendor rate card for the route/weight |
| Policy fix | Prevent the problem upstream | Update reimbursement policy to require a GST tax invoice + tracking number as mandatory documents |
Note: This answer covers GST compliance obligations (central law) and standard finance best-practice. For any decision to report suspected GST evasion by a specific vendor, consult a company's legal/compliance team first.
JaanoHaq provides general legal information based on publicly available Indian statutes and government portals. It is not legal advice and does not create an advocate–client relationship. Free legal aid is available via your District Legal Services Authority — eligibility under the Legal Services Authorities Act 1987 §12 covers women, children, SC/ST, persons with disabilities, industrial workers, victims of trafficking, and persons below your state's notified income threshold.