Guide to bill of supply under GST 

What is a bill of supply?

Eligibility for a bill of supply

Composition dealer

Exporters

Exempted goods supplier

Contents of a bill of supply

What is a bill of supply?

An invoice issued by a GST-registered business to a buyer includes the GST rate applicable to the goods and services. In some cases, some GST-registered companies are exempt from charging any taxes on invoices issued by them. In these cases, they are to provide a bill of supply. In other words, if GST has not been charged on a transaction or GST is not paid by the customers, then a bill of supply is to be presented.  

Eligibility for a bill of supply 

The following registered entities are eligible to issue a bill of supply:

• Composition dealer

Taxpayers who have revenue of less than Rs. 1.5 crores are eligible for the composition plan. (Rs 75 lakhs for north-eastern states and Uttarakhand). A dealer who chooses the composition scheme must deposit tax on their receipts; they are not permitted to collect tax from their customers. The composition dealer must pay the GST out of pocket. They are unable to include GST in the invoice. As a result, rather than a Tax Invoice, a composition dealer must produce a Bill of Supply. The composition dealer must write "composition taxable person not liable to collect revenue on supplies" on the Bill of Supply.

*The CBIC has increased the threshold limit to Rs. 1.5 crores. The notification took effect on April 1, 2019.

• Exporters 

In addition, an exporter is not required to charge GST on their invoice. It is owing to the export supplies being zero-rated. Due to this, a taxpayer who exports goods is liable to use a Bill of supply instead of the usual tax invoice. The dealer must mention in their Bill of Supply: "Supply Meant For Export On Payment Of IGST" or "Supply Meant For Export Under Bond Or Letter Of Undertaking Without Payment Of IGST."

• Exempted goods supplier

A Bill of Supply is required when a registered dealer supplies exempt goods or services. For instance, a registered taxpayer must submit a Bill of Supply when supplying raw agricultural products.

Contents of a bill of supply 

The GST law specifies specific details that must be included in a Bill of Supply. These are the specifics of a Bill of Supply:

• Supplier's name, address, and GSTIN

• Bill of Materials No (it must not surpass 16 characters, be generated sequentially, and each Bill of Supply will have a different identifier for that financial year) 

• Date of issue

• The recipient's name, address, and GSTIN will be displayed if the recipient is registered.

• Accounting Code for services or HSN Code for goods The number of digits that must be mentioned based on turnover in the previous fiscal year is as follows:

• Description of goods/services 

• After any discount or reduction, the value of the goods/services.

• A signature or Digital Signature of the supplier

An example of a bill of supply: