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April 30, 2025

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Basics of GST

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

GSTIN

2. Bill of Supply Number

Consecutive Serial Number (Unique for Financial Year)

3. Date of Issue

4. Recipient Details

Name

Address

GSTIN (if registered)

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

The recipient is unregistered AND

The recipient does not require a bill.

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)

GST Government Portal (for offline records)

Excel/Word templates (following the GST format)

Manual handwritten Bill (with all details)

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

100% of tax due (whichever is higher)

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.