December 30, 2022
Shreeja Ray

Bill Of Supply under GST

What exactly is meant by a "bill of supply"?

A tax invoice is provided to the customer by businesses who are registered to collect GST. On such an invoice, the Products and Services Tax (GST) rate that was applied to the goods and services sold is included. On the other hand, certain companies that are registered for GST are not permitted to include any tax on the invoices that they send out. These types of dealers are required to produce a Bill of Supply. When the Goods and Services Tax (GST) is not applicable to a transaction or when the GST is not to be recovered from the customers, a Bill of Supply must be produced.

Who should issue the Bill of Supply?

Bills of Supply ought to be issued by the following registered parties:

Composition Dealer

A taxpayer is eligible for the composition program if their annual turnover is less than Rs. 1.5 crores* (or Rs. 75 lakhs for taxpayers in north-east states and Uttarakhand). A dealer who chooses to participate in the composition scheme is required to make tax deposits on their own receipts; they are not permitted to collect any tax from the customers they serve. The GST is an out-of-pocket expense that the composition dealer is responsible for paying. They are unable to include a GST fee on the invoice. As a result, a composition dealer is required to generate a Bill of Supply as opposed to a Tax Invoice. On the Bill of Supply, the composition dealer needs to write the lines "composition taxable person not qualified to collect taxes on supplies." This is required by law.


Additionally, the Goods and Services Tax (GST) is not required to be included on an exporter's invoice. This is due to the fact that export supplies do not incur any tax. Therefore, a taxpayer who is exporting goods has the option of issuing a Bill of Supply rather than a tax invoice. In their Bill of Supply, the dealer is required to provide the following disclosures: "Supply Meant For Export On Payment Of IGST" and "Supply Meant For Export Under Bond Or Letter Of Undertaking Without Payment Of IGST."

The Supplier of Exempted Goods

It is mandatory that a Bill of Supply be issued whenever an exempt good or service is supplied by a registered dealer. As an illustration, a registered taxpayer who sells unprocessed agricultural products is required to send a Bill of Supply rather than a tax invoice to the buyer.

What's in the Bill of Supply?

The law governing the Goods and Services Tax (GST) has outlined a number of specifics that must be included in a bill of supply. The following is a list of the information that should be included in a Bill of Supply:

1. Include the supplier's name, address, and GSTIN number.

2. Number on the Bill of Supply (it must not exceed 16 characters, be generated consecutively and each Bill of Supply will have a unique number for that financial year)

3. Date of publication

4. In the event that the receiver is already registered, then the recipient's name, address, and GSTIN are required.

5. Whether it be the HSN Code of products or the Accounting Code of services

6. Detailed explanation of the products and services

7. value of the goods or services after taking into account any applicable discounts or rebates

8. Signature or digital signature of the provider of the goods or services

What are a few exceptions to the Bill of supply?

1. When the value of products, services, or both is less than Rs. 200, it is not necessary to produce a bill of supply.

2. Non-requirement of signature or digital signature: When a Bill of supply is issued digitally or electronically, no signature or digital signature is required. Frequently, we encounter invoices that include a statement. "This invoice is computer-generated. This does not require signature."

3. Considering the high volume of transactions in the banking, insurance, and passenger transportation sectors, taxpayers are exempt from maintaining the customer's address and serial number.

4. In the case of non-taxable supplies (such as gasoline and alcoholic beverages), tax invoices or other papers produced under any other act shall be recognized as bills of supply.

5. When the value of the products or services delivered is less than Rs. 1,200, a separate Bill of supply is not necessary if the buyer does not request one. At the end of each day, a consolidated Bill of supply can be sent to each recipient individually.

6. When a registered person supplies both taxable and exempt goods or services, he may issue a single " Invoice cum bill of supply."

7. The HSN code consists of eight digits, whereas the SAC code consists of only six. Relaxation is granted for the following number of HSN code digits:

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