Bill of Supply Under GST: Who Issues It, Format and How It Differs From a Tax Invoice
If you are registered under the GST composition scheme, or you sell goods and services that are exempt from GST, you cannot issue a regular tax invoice. You issue a bill of supply instead. It looks a lot like an invoice, but it carries no tax, and that difference matters for both you and your customer.
This guide explains who needs a bill of supply, what it must contain under Rule 49 of the CGST Rules, and the mistakes that can turn a simple bill into a compliance problem.
What is a bill of supply?
A bill of supply is the document a registered person issues instead of a tax invoice when no GST can be charged on the supply. It is provided for in Section 31(3)(c) of the CGST Act, and its contents are set out in Rule 49.
The key point: a bill of supply never shows GST. No CGST, SGST, IGST or cess, and no tax rate. Because no tax is charged, the buyer cannot claim input tax credit on it.
Who must issue a bill of supply?
1. Composition taxpayers
Businesses that opt for the composition scheme under Section 10 pay tax at a fixed percentage of their turnover from their own pocket. They are not allowed to collect tax from customers. So every sale they make is billed on a bill of supply.
A composition taxpayer must also print the words "composition taxable person, not eligible to collect tax on supplies" at the top of the bill of supply. This line tells the buyer straight away that no credit is available.
2. Suppliers of exempt goods or services
A regular GST-registered business that sells exempt items, such as fresh vegetables, unbranded cereals, or certain educational and healthcare services, issues a bill of supply for those exempt sales.
3. Exports without tax, in some cases
Exporters usually issue a tax invoice marked "supply meant for export under bond or LUT without payment of integrated tax". The bill of supply rule does not normally apply to exports. Check with your accountant if you are unsure.
Mandatory fields under Rule 49
A bill of supply must contain:
- Name, address and GSTIN of the supplier.
- A consecutive serial number of not more than 16 characters, using letters, numbers, hyphen or slash, unique for the financial year.
- Date of issue.
- Name, address and GSTIN or UIN of the recipient, if registered.
- HSN code for goods or SAC for services.
- Description of goods or services.
- Value of supply, after taking into account any discount or abatement.
- Signature or digital signature of the supplier or an authorised representative.
Compare this with the tax invoice fields under Rule 46. The fields for tax rate, tax amount, place of supply and reverse charge are missing, because there is no tax to describe.
Bill of supply vs tax invoice
| Tax invoice | Bill of supply | |
|---|---|---|
| Who issues it | Regular registered person making taxable supplies | Composition taxpayer, or anyone making exempt supplies |
| GST shown | Yes: rate and amount per head | No |
| Buyer can claim ITC | Yes, if other conditions are met | No |
| Legal basis | Section 31(1)/(2), Rule 46 | Section 31(3)(c), Rule 49 |
| Special declaration | Reverse charge Yes/No | "Composition taxable person…" for composition dealers |
Small sales: when you can skip it
Rule 49 allows a supplier to skip issuing a separate bill of supply when the value of the supply is less than 200, provided the buyer does not ask for one. In that case, the supplier issues a consolidated bill of supply at the end of each day for all such small sales. This is common for kirana shops and small retailers.
Selling both taxable and exempt goods?
A regular taxpayer who sells both taxable and exempt goods to an unregistered buyer in the same sale can issue a single "invoice-cum-bill of supply" under Rule 46A. The taxable lines show GST, and the exempt lines show none. For registered buyers, issue the tax invoice and the bill of supply as separate documents, so the buyer's records match yours.
Common mistakes
- Showing GST on a bill of supply. If a composition dealer collects tax, the tax becomes payable to the government, and the dealer has broken the scheme's conditions. This can lead to penalties and even losing composition status.
- Leaving out the composition declaration. It is required on every bill.
- Using the word "Tax Invoice" as the heading. Title the document "Bill of Supply".
- Sharing a number series with tax invoices in a way that confuses your records. Many businesses use a separate prefix, such as BOS/26-27/001.
- Missing HSN codes. Composition taxpayers are still expected to give HSN details in their returns, so keep them on the bill.
Does a bill of supply need a receipt?
A bill of supply records the sale. When the customer pays, you can issue a payment receipt as proof. If they pay in advance before you supply anything, the rules on receipt vouchers for advances apply.
Make a bill of supply online
The OwnInvoice bill of supply generator is built for this case. It keeps the document tax-free, so you cannot add GST to a line by mistake. It pre-fills the composition declaration (you can edit or remove it for exempt supplies), and it has GSTIN fields for you and your customer. Add the HSN or SAC in each item's description. You get a printable PDF in Indian rupees, and if you need to show the total in words, the amount in words tool converts it in lakh and crore format.
Note: This article is a general explanation, not legal advice. Exemption lists and composition conditions change from time to time, so confirm your position with a GST practitioner.