Bill of supply under GST: meaning, format and when to use it

A bill of supply is an invoice that does not charge GST. You use it when you are not allowed to collect tax on a sale. It comes from Section 31(3)(c) of the CGST Act and Rule 49 of the CGST Rules.

Who issues a bill of supply?

• Composition dealers. They pay tax at a fixed rate on turnover and cannot collect GST from customers. Every sale gets a bill of supply.
• Sellers of exempt goods or services, for example fresh fruit and vegetables, unbranded cereals, or many healthcare and education services.
• A regular GST-registered business that sells both taxable and exempt items can issue one combined invoice that covers both.

What a bill of supply must show

1. Your name, address and GSTIN.
2. A serial number of up to 16 characters, unique for the financial year.
3. Date of issue.
4. Customer's name, address and GSTIN, if registered.
5. HSN or SAC code.
6. Description of the goods or services.
7. Value after discount.
8. Your signature or digital signature.

A composition dealer must also print "composition taxable person, not eligible to collect tax on supplies" at the top of the bill.

Tax invoice vs bill of supply

Common mistakes

• A composition dealer writing GST on the bill. This is not allowed, and the tax collected still has to be paid.
• Leaving out the composition line at the top.
• Using the same number series as tax invoices without keeping it unique.

Like tax invoices, a bill of supply below ₹200 to an unregistered customer can be covered by one consolidated bill at the end of the day.