What Is a Bill of Supply? (vs Tax Invoice)

A bill of supply under GST is an invoice that carries no tax — it is what you issue when you cannot charge GST, unlike a tax invoice which shows the GST charged. A bill of supply is a document issued by a registered person for the supply of exempt goods or services, or by a composition dealer, where no GST is collected from the buyer and therefore no tax amount is shown. This article explains what it is, how it differs from a tax invoice, who must issue it, and whether credit can be claimed on it.

What is a bill of supply?

A bill of supply is a sales document issued when GST cannot be charged on a supply. It is used for exempt or non-taxable goods and services, and by composition dealers. It looks like an invoice but shows no GST rate or tax amount, because the supplier is not collecting tax on that sale.

Bill of supply vs tax invoice

Both are sales documents, but they serve opposite tax situations. Here is the comparison:

• Tax charged: a tax invoice shows GST (CGST plus SGST, or IGST); a bill of supply shows no tax at all.
• When used: a tax invoice is for taxable supplies by a regular registered dealer; a bill of supply is for exempt supplies or sales by a composition dealer.
• Input tax credit: a tax invoice lets the buyer claim input tax credit; a bill of supply does not, since no tax was charged.
• Tax rate column: present on a tax invoice; absent on a bill of supply.

If you are weighing a proforma document against a real invoice, our guide on proforma invoice vs tax invoice clears up that related confusion.

Who has to issue a bill of supply?

Two main groups issue a bill of supply instead of a tax invoice.

Suppliers of exempt goods or services

If a registered business supplies goods or services that are exempt or carry a nil rate — for example certain agricultural produce or specified services — it issues a bill of supply, since there is no GST to charge on that sale.

Composition dealers

A composition dealer pays GST at a flat rate out of their own pocket and cannot collect tax from customers. So a small Surat trader under the composition scheme issues a bill of supply for every sale, never a tax invoice. To understand who qualifies and the trade-offs, read our GST composition scheme guide.

What are the mandatory fields on a bill of supply?

A bill of supply has its own required fields, similar to a tax invoice but without the tax columns. It should carry:

• Name, address, and GSTIN of the supplier.
• A consecutive serial number unique for the financial year, and the date of issue.
• Name, address, and GSTIN or UIN of the recipient, where the recipient is registered.
• HSN code for goods or SAC code for services, as applicable.
• Description of the goods or services and the value of supply.
• Signature or digital signature of the supplier or an authorised person.

A composition dealer is generally also required to mention that they are a composition taxable person not eligible to collect tax on supplies. Confirm the current mandatory fields on https://cbic-gst.gov.in, and for goods-document layout in general see our GST invoice format guide.

Can you claim input tax credit on a bill of supply?

No. A bill of supply carries no GST, so there is no tax for the buyer to claim as input tax credit (the credit a business takes for GST paid on its purchases). The whole point of the document is that tax was never charged.

This has a practical effect. If you buy from a composition dealer or buy exempt goods, you receive a bill of supply and cannot reduce your output tax with anything from that purchase. When you need to pass on credit to your buyers, you must be eligible to issue a proper tax invoice instead. If a buyer asks for credit against a bill of supply, the answer is always no, and it is worth explaining why so the relationship stays clear.

Issuing the right document — tax invoice or bill of supply — for each sale is easy to get wrong by hand, especially under the composition scheme. Use our free invoice generator to produce the correct GST document for your situation in minutes, with the right fields and no tax errors.