Glossary
GST, TDS and roll-trade terms, defined a line at a time.
The tax, trade and operations terms a trading business meets every week: what each means, what a mistake costs, and what Ordence does with it.
Last reviewed 13 October 2026. Income-tax section numbers carry both schemes: the 1961 number and the Income-tax Act 2025 number in force since 1 April 2026.
Two numbering schemes are live. The Income-tax Act 2025, in force since 1 April 2026, moved non-salary TDS (tax deducted at source) into Section 393, with portal payment codes (as reported, not from the Act). The 1961 numbers still govern periods up to 31 March 2026, including your CA's FY 2025-26 audit. Rates match the Section 393 table of the Income-tax Act 2025 as enacted, which kept the 1961 rates; check later Finance Act changes with your CA. The Finance Act 2025 moved several thresholds from 1 April 2025; the new rent, professional-fees and commission thresholds are not printed. Section 194H fell from 5% to 2% on 1 October 2024, mid-year: that is how printed rates go stale. Use this for the shape of a rule, your CA for the number.
GST
Words that decide whether an invoice is usable and whether claimed credit survives an assessment.
| Term | What it is | Why it matters |
|---|---|---|
| GSTIN | The 15-character GST number: state code, PAN, entity code, the letter Z, a check character. | A wrong one blocks your buyer's credit, and they find out at month-end. Ordence reads the state from the customer's GSTIN. |
| HSN and SAC | Codes for goods (HSN) and services (SAC). The code sets the rate. | Wrong code, wrong rate, on every invoice. Ordence prints the HSN on each invoice PDF. See HSN codes for distributors. |
| Place of supply | The state a sale counts as made in. It decides which tax you charge, not how much. | Get it wrong and the total is exact but the invoice unusable: credit lands in the wrong state, and reclaiming the tax under Section 77 takes months. |
| Place of supply for immovable property | Section 12(3). For construction, an unfinished flat, a works contract, a lease or an architect's fee, it is where the property is. | Not where the buyer is. A Maharashtra developer selling a Pune flat to a Karnataka company charges CGST and SGST. Software that reads the customer record gets it wrong. |
| CGST, SGST, IGST, UTGST | Within a state: CGST (centre) plus SGST (state). Between states: IGST. In a union territory without a legislature, UTGST replaces SGST. | Place of supply sets the split; nobody should pick it by hand. Round each line, then total, or the split stops adding up. Ordence's quote builder works it out. |
| ITC | Input tax credit: GST you paid suppliers, set off against GST you collected. | It is working capital. You can claim only what shows in GSTR-2B (below), and after the Section 16(4) deadline it is gone. |
| Blocked credit, Section 17(5) | GST you can never reclaim: motor cars, food and drink, club memberships, building immovable property for yourself, and goods destroyed, written off or given away as free samples. | A wrong claim still gives a tidy return. The bill comes years later with 18% interest under Section 50. |
| Reverse charge, RCM | The buyer pays the GST, not the supplier. Examples: legal services, goods transport, imported services, metal scrap from an unregistered seller. | Easy to miss, as the bill shows no tax. Your CA pays and claims it in the return. |
| Job work, ITC-04 | Inputs or machines sent to another business for processing, on a delivery challan, without tax. Inputs come back within a year, machines within three, or the dispatch counts as a sale. ITC-04 reports what went out and came back: twice a year above ₹5 crore turnover, else yearly. | A challan left past the limit becomes tax with interest. Ordence prepares the ITC-04 figures from the challans; you or your CA file them. |
| Inverted duty | Inputs taxed higher than what you sell, such as 18% steel into a 5% product. The extra credit on input goods can be refunded under Rule 89(5). | Credit on services and machinery does not count, and the refund must be claimed. |
| LUT | Letter of undertaking, filed once a financial year, so exports and supplies to a special economic zone go out without IGST. | Without one, you pay IGST on exports now and claim a refund later. Ordence records which way each export went. |
| GSTR-1 | Your return of sales, filed monthly or quarterly. | Your buyers' credit comes from it; file late and they chase you. Ordence builds the GSTR-1 JSON (upload file); you or your CA file it. |
| GSTR-2B | A fixed monthly statement built from what your suppliers filed. It caps the credit you can claim. | A bill your supplier never uploaded is not credit; it is your money in their hands. Ordence matches GSTR-2B to your supplier bills. See GSTR-2B reconciliation. |
| GSTR-3B | The monthly summary return where tax is paid. Table 4(A) is credit available, Table 4(B) credit reversed. | They are reported separately; books that net them off cannot fill the form. Ordence works out the GSTR-3B figures. |
| E-invoice and IRN | Above a turnover threshold, business invoices must be registered on the Invoice Registration Portal (IRP) before issue. It returns a reference number (IRN) and a QR code. | No IRN, no valid tax invoice, and your buyer's credit is at risk. Ordence has no IRP connection: the IRN is made on the portal and recorded against the invoice. |
| E-way bill | An electronic permit, made on the NIC portal, to move goods above a value threshold. Validity depends on distance. | A vehicle stopped without one is detained. Ordence prepares the JSON and puts the e-way fields on the packing note. See e-way bill thresholds. |
TDS and paying suppliers
Small withholding errors stay silent and land two years later as your problem.
| Term | What it is | Why it matters |
|---|---|---|
| TDS | You keep back part of certain payments, deposit it against the payee's PAN, and pay them the rest. | The liability is yours. Miss it and Section 201(1), now s.398, puts you in default for the whole amount, interest runs, and 30% of the expense is not deductible under Section 40(a)(ia), now s.35(b)(i), until the year the tax is paid. Ordence tracks TDS by section and rate per bill; it does not file TDS returns. |
| Section 194C, now s.393 codes 1023 and 1024 | Contractors. 1% to an individual or HUF (family business), 2% to anyone else. | The trap is the total. Limits: ₹30,000 per payment, ₹1,00,000 a year. Four payments of twenty-five thousand cross the yearly limit together, and then all of it is taxed. Check current limits with your CA. |
| Section 194H, now s.393 code 1006 | Commission and brokerage. 2%, down from 5% on 1 October 2024. | A mid-year change means wrong deductions on one side of the date. Agent commission falls here. |
| Section 194I, now s.393 codes 1008 and 1009 | Rent. 2% for plant and machinery, 10% for land, building or furniture. | Often forgotten: rent goes out by standing instruction, with no approval step. |
| Section 194J, now s.393 codes 1027 and 1026 | Professional or technical fees. 10% professional, 2% technical. | A consultant and a testing lab billing the same amount need different deductions. |
| Section 194Q, now s.393(1) code 1031 | Goods bought from one seller beyond 50 lakh in a year. 0.1%, and only on the excess, unlike most sections. | Sixty lakh from one supplier means 0.1% of ten lakh: a thousand rupees, not six thousand. The base excludes GST shown separately, per CBDT Circular 13/2021. One bill under 50 lakh proves nothing; the test is the year's total. |
| Section 206AA, now s.397(2) | No PAN on file. The rate becomes 20%, or the section rate if higher; 5% for purchase of goods. | No PAN means you are about to deduct too little. Ordence applies 206AA where a vendor has no PAN. |
| Section 206AB (historical) | Omitted by the Finance Act 2025 from 1 April 2025. It charged twice the section rate or 5%, whichever was higher, on payees who had not filed returns. | It appears in old ledgers. A FY 2024-25 return revised later follows the rule in force on the payment date. |
| Section 201(1A), now s.398 | Interest on late TDS: 1% a month from when it should have been deducted until it is, then 1.5% a month until deposited. Part of a month counts as whole. | Paying on the eighth, not the seventh, costs a full month. |
| Form 16A, now Form 131 | The quarterly certificate you give a vendor for non-salary TDS, downloaded from TRACES (the TDS portal) after your return is processed. | Vendors need it to claim credit for the tax you took. |
| MSME and Section 43B(h), now s.37(2)(g) | Pay a registered micro or small enterprise within 45 days with a written agreement, 15 days without. Pay later and you lose the deduction that year. | Medium enterprises are not covered, nor are traders on Udyam (the MSME register): the Ministry of MSME's memorandum of 2 July 2021 admits wholesale and retail traders only for priority-sector lending. It is the single most misapplied point in the rule. Ordence runs the MSME payment clock on payables. |
Roll and batch trade
Terms for trades that sell by the reel, roll, coil, drum or lot: foil, film, paper, labels, textiles, cable and wire.
| Term | What it is | Why it matters |
|---|---|---|
| Reel, roll, coil, drum | Material wound on a core, stocked as one numbered unit. Paper and film say reel; foil, labels and fabric say roll; house wire comes in a 90-metre coil, power cable on a drum. The core (1, 3 or 6 inch) must fit the buyer's machine. | Reels of one item differ in width, length, lot and shade. Specs vary by trade: micron (thickness) for film and foil; GSM (weight, not thickness), BF (burst factor) and deckle (width) for paper. Ordence keeps a barcoded register of each reel. |
| Jumbo reel | The full-width mill reel, before cutting. Paper calls it the mill reel. | Its landed cost and mill lot must pass to every reel cut from it, or margins and tracing break. |
| Slitting | Cutting a wide reel lengthwise into narrower child reels. | The cut plan decides stock versus waste. In Ordence, child reels inherit the parent's lot and landed cost. Cable is not slit; it is cut to length from the drum. |
| Kerf | Material lost at each cut on a slitter. | Small per cut, real across many. Ordence's cut plans allow for it and show the waste in rupees. |
| Edge trim | The strip cut off each outer edge for clean edges. | Plan for it, or the last child reel comes out short. |
| Mill lot | The mill's production batch, printed on its label or certificate (or the maker's batch, for cable and label stock). | After a complaint, the lot shows who else holds the same run. Ordence traces invoice to reel to mill lot. |
| Shade | The colour or finish of a lot; two lots can look different. In fabric it is the dye lot, with a shade number. | Mixed shades invite a return. Ordence keeps customer shade approvals and blocks dispatch of mixed or unapproved lots. |
| Landed cost | What stock really cost in your godown: price plus freight, duty, clearing and other charges. | Margin on invoice price alone is not real margin. Import IGST is held as credit, not added to cost. Ordence carries landed cost per square metre on each reel, split by value or area. |
| LR, lorry receipt | The transporter's receipt for goods booked on a lorry. | Quote its number when goods go missing or arrive short. Ordence's packing note carries transporter, LR and e-way bill fields. |
| POD, proof of delivery | Proof the customer got the goods: a signed copy, photo or stamp. | Without it, a dispute is your word against theirs. Ordence captures POD by phone with signature, photo and location, even offline. |
Operations
Less scary than tax words, but they start more arguments: people mean different quantities by the same word.
| Term | What it is | Why it matters |
|---|---|---|
| Three-way match | Purchase order, goods receipt and supplier invoice must agree before you pay. | It stops you paying for a hundred bags when eighty arrived. |
| Ageing bucket | Money outstanding, grouped by lateness: 0 to 30 days, 31 to 60, 61 to 90, over 90. | Banks ask for it before releasing funds; collection meetings run on it. Ordence keeps receivables and bill-wise ageing. |
| Reorder level | The stock level that triggers a reorder, with a reorder quantity and lead time in days. | Without lead time it is a guess. Ordence raises reorder alerts. |
| Available versus on hand | On hand is what is in the godown. Available is on hand minus stock promised to open orders. | Four hundred on hand with three hundred promised leaves a hundred to sell. Leave that sum to a tired person and stock gets sold twice. |
| Batch and lot | A batch or lot number marks a production run. A serial number marks one single item. | It sets how fast you answer a complaint or recall. Ordence tracks reels and batches by number, with dead stock and shelf life reports. |
Real estate
Definitions only. Words a developer's sales team, accounts team and lender each use a little differently.
| Term | What it is | Why it matters |
|---|---|---|
| RERA | The Real Estate (Regulation and Development) Act, 2016: registration, 70% of collections in a designated account, quarterly disclosures, and a set interest rate for delay. | Section 2(za) makes that rate work both ways: what you charge a late buyer, you owe a buyer you delayed. See RERA reporting for developers. |
| Carpet, built-up, super built-up | Carpet is usable area inside the walls (RERA's definition). Built-up adds the walls. Super built-up adds a share of common areas via a developer-chosen loading factor. | Under RERA you sell on carpet. The loading factor is why one rate per square foot can mean different costs. |
| Absorption | Units booked plus sold, as a share of units actually on the market. | Flats held back for promoters were never on sale; counting them as unsold makes a healthy project look like it is failing. |
| Channel partner | A broker who brings buyers and earns brokerage on a booking. | The payout is commission, so Section 194H applies at 2%. |
| Occupancy certificate | The local authority's permission to occupy a finished building. | Without it, no registration and no loan disbursal. For GST, a flat paid for entirely after the completion certificate (or first occupation, if earlier) is outside GST. Ask your CA about credit on a mixed project. |
| Construction-linked plan | Instalments fall due as construction stages are certified, not on calendar dates. | Collections then track the build instead of running ahead of it. |
The five where a wrong answer is invisible
Nothing turns red, the return files, and the cost comes years later.
- Place of supply. The total is right; the invoice is unusable.
- Section 17(5). A blocked credit claimed anyway still balances.
- The Section 194C yearly total. Four payments that each look fine, and the contractor has gone.
- The Section 16(4) clock. Credit you were owed expires unclaimed.
- Section 43B(h), now s.37(2)(g). You pay on day sixty, the vendor is happy, and the expense stops being deductible.
Not advice
Where software stops and your CA starts.
In short: this is not advice, and Ordence is not your chartered accountant.
Software applies rules and shows its working. Whether a vendor is really micro or small, how an item is classified, or whether a credit is blocked on your facts are judgements for a person who signs. Never file a figure you cannot explain to your CA.
Questions
Three questions about the glossary and the product.
Our CA handles all of this. Why does it need to be in the software?
Your CA sees the data afterwards. A place of supply set wrongly in March is an invoice your CA fixes in October. Getting the rules right in the system makes the invoice right when issued.
Are these rates current?
They are as last checked; thresholds change with each Finance Act. Ask your CA for the number on the day.
Does Ordence file GST returns, e-invoices or e-way bills?
No. It builds GSTR-1 JSON, works out GSTR-3B figures, and prepares e-way bill JSON for a person to upload, and records the IRN made on the portal. Nothing is filed through an API. It does not file TDS returns either.
Bring the rule you are least sure about.
A blocked credit, a threshold, a reel that never reconciles: a good start to a talk about fit.
Questions first? Email the founders.