What is PO number in GST?
Purchase order (PO) which is PO full form in GST is a formal document issued by the buyer to the seller that authorizes the purchase transaction. However, the Purchase Order India GST PO once accepted by the seller becomes a binding contract between the parties involved in such a transaction.
Purchase Order Fields
Normally, a purchase order contains the following fields and purchase order format India is as follows:
- Issuing entity name: The purchase order contains the name of the buyer.
- Issuing entity address: GST PO number also contains the address of the buyer.
- Item details: Purchase order or PO mentions the description of the goods that are involved in the transaction.
- Quantity item: It is mandatory for the person who is generating purchase order shall also mention the item quantity.
- Item per unit rate: The PO shall also mention the item rate per unit at which it is intended to be purchased.
- Ship to location: Here the person generating the purchase order shall write the location at which the product has to be shipped.
- Payment terms: Purchase order must also contain the payment term like mode of payment or date/time of payment.
- Delivery terms: The purchase order shall also contain the delivery item such as if the condition of the product is not up to the mark then it can be returned to the seller.
- Other details: The PO must contain other details such as purchase order number, date on which the PO is generated, seller’s name, address of the quantity, purchase order validity and tax details.
The Bottom Line
A purchase order or PO is a document that contains details regarding good or service that a buyer wants to purchase from the seller. PO number in GST eliminates the chances of error that may take place at the time of supply. In order to make it binding, the seller should accept the generated purchase order by the buyer. Once it is accepted by the seller, he generates a sale invoice in the name of the buyer. It shall be noted that the purchase order and the sales invoice carries the same details.
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