What is Bill of Supply under GST- Meaning and Format The implementation of Goods and Services Tax (GST) in India has streamlined and simplified tax record keeping. A notable document under GST is the Bill of Supply. Unlike Tax Invoices that are common in most businesses, the Bill of Supply caters to specific categories of persons registered under GST. This article covers What is Bill of Supply under GST, its format, governing laws, primary contents, and how it differs from Tax Invoice. Every business operating under a composition scheme or dealing in exempt supplies needs to actively understand this document.
Overview Table Particulars Details Applicable To Composition Dealers, Exempt Goods/Services Suppliers, SEZ Developers without tax charge Purpose Record a sale without charging GST Governed By Section 31(3)(c) of CGST Act, 2017 Contains Seller & Buyer details, Product description, Total Value, Declaration Format Prescribed under GST Rules Mandatory GSTIN Mention Yes (if registered) Usage of GST Invoice Not allowed with the Bill of Supply
What is the Bill of Supply under GST? A Bill of Supply is a business document given by a supplier registered under GST who cannot charge GST on their supplies. It functions as a proof of sale but lacks tax information such as CGST , SGST, or IGST.
Under Section 31(3)(c) of the CGST Act, 2017, every registered person providing exempted goods or services or a composition dealer is obligated to issue a Bill of Supply in place of a tax invoice.
Meaning of Bill of Supply under GST To put it simply, a Bill of Supply is like a tax invoice but does not include GST. It is issued when:
There is no GST applicable to a particular transaction.
The seller has no legal authority to collect tax from the buyer.
The supplies are either exempt or fall under the composition scheme.
Who Should Issue Bills of Supply? Due to GST requirements, the following suppliers are required to issue a Bill of Supply:
1. Composition Dealers: Businesses registered under the GST Composition Scheme are not allowed to charge GST on their outward supplies. They pay tax at a fixed rate on turnover. However, they issue Bills of Supply to the customers.
2. Suppliers of Exempted Goods or Services: If a registered person deals with exempted goods/services exclusively (like healthcare, education, agricultural products), such persons must issue a Bill of Supply.
3. Exporters and SEZ Developers (Without GST Charge): Exporters who supply goods/services without charging GST (under LUT/Bond) must issue a Bill of Supply.
Difference Between Tax Invoice and Bill of Supply Basis Tax Invoice Bill of Supply GST Component Contains GST No GST mentioned Applicability Regular GST dealers Composition dealers or exempt suppliers GST Credit Eligibility Buyers can claim ITC No ITC on Bill of Supply Usage Taxable supplies Exempt supplies or Composition scheme Section Section 31(1) of CGST Act Section 31(3)(c) of CGST Act
Format of Bill of Supply under GST As per Rule 49 of the CGST Rules, 2017, a Bill of Supply must contain the following mandatory details:
1. Supplier’s Details Name
Address
2. Bill of Supply Number Consecutive Serial Number (Unique for Financial Year)
3. Date of Issue 4. Recipient Details Name
5. Description of Goods or Services 6. Value of Supply Consideration of goods/services excluding tax.
7. Signature of Supplier Manual or Digital Signature.
Mandatory Declaration on the Bill of Supply As per Rule 49 of the CGST Rules, the following declaration is mandatory on every Bill of Supply :
“Tax not payable under Section 10 or exempt supply as per GST Law.”
When is a Bill of Supply Not Required? According to Rule 49, a Bill of Supply is not required in two specific situations:
The value of supply is less than ₹200 per bill AND
However, the supplier must still issue a consolidated Bill of Supply at the end of the day for such transactions.
How to Generate a Bill of Supply? You can generate a Bill of Supply using:
GST Accounting Software (like Tally, Zoho Books, QuickBooks)
Importance of the Bill of Supply under GST 1. Legal Proof of Sale: Acts as a legal record of sale even without GST.
2. Compliance under GST Law: Mandatory for exempt suppliers and composition dealers.
3. Avoid Penalties: Failure to issue a Bill of Supply may attract GST penalties.
4. Transparency: Clarifies to the buyer that GST is not chargeable.
Penalty for Not Issuing a Bill of Supply As per Section 122 of the CGST Act, failure to issue a Bill of Supply or issuing incorrect details can attract a penalty of:
₹10,000 or
For composition dealers, since GST is not charged, the penalty will be ₹10,000.
Conclusion A Bill of Supply under GST is an essential document for businesses operating under the composition scheme, supplying exempt goods/services, or making GST-free exports. It ensures transparency, maintains compliance, and serves as legal proof of sale without GST liability.
FAQs Q1. Can a Bill of Supply be issued along with a Tax Invoice? No, a supplier can issue either a Tax Invoice or a Bill of Supply, but not both for the same transaction.
Q2. Is GST mentioned in the Bill of Supply? No, GST is never mentioned in a Bill of Supply. Only the total value of goods/services is mentioned.
Q3. Can input tax credit (ITC) be claimed on a Bill of Supply? No, the buyer cannot claim ITC on a Bill of Supply because GST is not charged.
Q4. What is the GST rule for the serial number in the Bill of Supply? It must be a consecutive serial number, unique for each financial year, containing alphabets or numerals (or both), not exceeding 16 characters.
Q5. Can a Bill of Supply be issued for exports? Yes, exporters supplying goods/services without GST charge (under LUT/Bond) must issue a Bill of Supply.
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