Guide to bill of supply under GST

A bill of supply is a document issued by a supplier of goods or services instead of a tax invoice. It is a simpler version of the tax invoice and includes no tax components. The bill of supply is issued by businesses that fall under the composition scheme or businesses that supply exempted goods or services. The main purpose of a bill of supply is to keep track of the supplier’s sales and maintain proper accounting records. In this way, the bill of supply helps the supplier to comply with the GST regulations without having to go through the process of issuing a tax invoice. This article will comprehensively explain the bill of supply, its purpose, and the eligible businesses to issue it.

Who Should Issue Bill of Supply and When? 

A business typically issues a bill of supply when selling goods and services exempt from GST. For instance, a fruit vendor would not issue a regular tax invoice but instead raise a supply bill for their customers.

Moreover, if a business is registered under the Composition scheme, it should only issue a bill of supply to its customers and not tax invoices since it cannot charge GST on its sales transactions.

The following individuals are required to issue a Bill of Supply:

Supplier of exempted goods or services: Any registered taxable person who supplies exempt goods or services must issue a bill of supply.

Composition Dealer: Any taxpayer registered under the composition scheme can also issue a bill of supply since they cannot claim an Input Tax Credit on the supplied goods or services.

Exporter: Taxpayers who export goods or services can also issue a bill of supply since export is considered a zero-rated supply under GST. When exporting, the following details must be included:

1. Recipient’s name
2. Recipient’s address
3. Name of the country, address, and pin code where the goods will be exported.

Bill Of Supply Format Under GST

The supplier shall issue a bill of supply GST containing the following details. 

• Trade name, address, and GST identification number of the supplier. 
• Consecutively numbers serial numbers, not exceeding 16 characters in one or multiple series, unique for a financial year.
• Date of its issue
• Address, products, and services, trademark. The recipient’s tax identification number or, if registered, unique identity number. 
• Harmonized System of Nomenclature code of goods or services. 
• Describe the products, services, or both.
• Value of supply of goods, services, or both, considering any discounts or reductions.
• Designation in the form of a signature or digital signature of the supplier or his authorised representative.

Contents of Bill of Supply 

The GST law has specified specific particular that should be present in a bill of Supply. These are the details the bills of Supply should have.

• Name, address, and GSTIN of supplier
• Each bill of supply will have a unique number for the financial year that cannot be more than 16 characters and must be generated sequentially.
• Date of Issue
• The recipient’s name, address, and GSTIN are provided if they are registered.
• HSN code for items or a service’s accounting code. Based on turnover in the prior fiscal year, the minimum number of digits that must be provided is as follows:

• Description of goods/services
• Value of goods/services after adjusting any discount or reduction
• You can easily create and print a GST-compliant bill of Supply with the supplier’s signature or digital signature.  

What are some relaxations for issuing a Bill of Supply?

A value less than Rs. 200: If the value of goods or services is less than Rs. 200, a Bill of Supply is not required to be issued.

Non-requirement of signature or digital signature: When a Bill of Supply is issued digitally or electronically, there is no requirement for a signature or digital signature. Often, invoices may carry a statement such as “This invoice is generated on a computer. This does not require a signature.”

Relaxation for serial number and address of customer: Taxpayers in the banking, insurance, and passenger transportation sectors need not maintain the address of the customer and serial number due to many transactions.

Deemed Bill of Supply: In the case of non-taxable supply, such as petroleum or alcoholic liquor, a tax invoice or other document issued under any other act shall be considered a Bill of Supply.

Consolidated Bill of Supply: When the value of goods or services supplied is less than Rs. 1200, a separate Bill of Supply is not required if the buyer does not demand it. A consolidated Bill of Supply can be issued separately at the end of each day to each recipient.

Invoice-cum-bill of supply: When a registered person supplies both taxable and exempted goods or services, they can issue a single ‘Invoice cum Bill of Supply’.

Relaxation in HSN Code or SAC: HSN code is an 8-digit code, while SAC is a 6-digit code, and there is a relaxation in their use.

Conclusion 

A bill of supply is an essential document that businesses must issue when supplying exempted goods or services or registering under the composition scheme. It is considered proof of transaction and includes important details such as the recipient’s name and address, the transaction’s date, and the value of the goods or services supplied. Businesses must ensure they issue the bill of supply complying with the guidelines under the GST laws to avoid penalties and legal consequences.