Learn who should issue a Bill of Supply, its contents, and specific scenarios such as composition dealers, exporters, and suppliers of exempted goods.
What is a Bill of Supply?
Who should issue Bill of Supply?
Contents of Bill of Supply
FAQs on Bill of Supply
A Bill of Supply is a document issued by GST-registered businesses when GST is not applicable on a transaction.
Definition and Purpose
A Bill of Supply is issued instead of a tax invoice when GST cannot be charged.
Used by businesses under the composition scheme.
Issued for exempted goods and services.
Applicable for zero-rated supplies like exports.
Legal Framework
The GST law mandates the issuance of a Bill of Supply under specific conditions.
Section 31(3)(c) of the CGST Act governs its issuance.
No GST is charged or collected from the buyer.
It serves as proof of transaction without tax liability.
When to Issue
Understand the scenarios where a Bill of Supply is necessary.
For transactions involving exempt goods.
When a composition dealer makes a sale.
For export transactions under LUT or bond.
Difference from Tax Invoice
Key differences between a Bill of Supply and a Tax Invoice.
No GST rate or amount is mentioned in a Bill of Supply.
Used for transactions where GST is not applicable.
Tax Invoice is used when GST is charged.
Identifying the categories of businesses required to issue a Bill of Supply.
Composition Dealer
Dealers under the composition scheme must issue a Bill of Supply.
Applicable for turnover up to ₹1.5 crores (₹75 lakhs for NE states and Uttarakhand).
Cannot collect GST from customers.
Must mention 'composition taxable person' on the document.
Exporters
Exporters issue a Bill of Supply for zero-rated supplies.
Exports are zero-rated under GST.
Must mention 'Supply Meant For Export' on the Bill.
Can be under bond or LUT without IGST payment.
Exempted Goods Supplier
Suppliers of exempt goods must issue a Bill of Supply.
Applicable for unprocessed agricultural products.
No GST charged on exempt goods.
Serves as a record of exempt transactions.
Service Providers under Composition Scheme
Service providers opting for composition scheme also issue a Bill of Supply.
Turnover threshold of ₹50 lakhs for services.
Cannot charge GST on services provided.
Must comply with composition scheme rules.
Mandatory details that must be included in a Bill of Supply.
Supplier Details
Information about the supplier issuing the Bill of Supply.
Name and address of the supplier.
GSTIN of the supplier.
Unique Bill of Supply number.
Recipient Details
Details of the recipient if they are registered under GST.
Name and address of the recipient.
GSTIN of the recipient, if applicable.
Must be included for B2B transactions.
Goods/Services Details
Description of the goods or services supplied.
HSN code for goods or SAC for services.
Description and quantity of goods/services.
Value after any discounts or abatements.
Signature
Authentication of the Bill of Supply.
Signature or digital signature of the supplier.
Ensures the authenticity of the document.
Can be manually signed or digitally signed.
What is the turnover limit for composition dealers to issue a Bill of Supply?
For FY 2025-26, the turnover limit for composition dealers is ₹1.5 crores, and ₹75 lakhs for North-East states and Uttarakhand.
Can a Bill of Supply be issued for inter-state transactions?
Yes, a Bill of Supply can be issued for inter-state transactions if the goods or services are exempt or the supplier is a composition dealer.
Is it mandatory to mention HSN codes in a Bill of Supply?
Yes, HSN codes must be mentioned based on the supplier's turnover: 2-digit for ₹1.5-5 crores, 4-digit for above ₹5 crores.
What should be done if a mistake is found in a Bill of Supply?
If a mistake is found, issue a revised Bill of Supply with the correct details and ensure both documents are retained for records.
Are digital signatures acceptable on a Bill of Supply?
Yes, digital signatures are acceptable and legally valid for authenticating a Bill of Supply, ensuring compliance with GST norms.
How does a Bill of Supply differ from a delivery challan?
A Bill of Supply is for non-taxable transactions, while a delivery challan is used for transporting goods without a sale, like job work.
Can a Bill of Supply include both exempt and taxable goods?
No, a Bill of Supply should only include exempt goods or services. Taxable goods require a separate tax invoice.
Is there a specific format for a Bill of Supply?
While there is no prescribed format, a Bill of Supply must contain specific details like supplier information, description of goods, and signature.
Can a Bill of Supply be issued by a non-GST registered business?
No, only GST-registered businesses can issue a Bill of Supply. Non-registered businesses do not issue GST-related documents.
What happens if a Bill of Supply is not issued when required?
Failure to issue a Bill of Supply when required can lead to penalties under GST law, as it is a non-compliance with GST regulations.