Generally, the businesses registered under Goods and Service Tax (GST) are required to issue Tax invoices and mention the GST rate charged on it. But when businesses are not liable to charge GST they have to issue bill of supply.
A Bill of Supply is a document issued by businesses Registered under GST opting for composition scheme or dealing with exempted Goods. It means they will be issuing Bill of Supply in place of a Tax Invoice.
Therefore, in a nutshell, a Bill of Supply is issued when GST is not applicable on a supply or when GST is not to be charged from the customer.
Who are required to issue Bill of Supply?
The following registrants are required to issue Bill of Supply:
1. Composition Dealer
A taxpayer whose turnover is less than Rs 1 crore (75 lakh in case of special category states) can opt for composition scheme. They are not allowed to collect any tax from their buyers. A dealer opting for composition scheme has to deposit tax on their receipts themselves, they have to pay a certain percentage of their turnover as their GST. The GST has to be paid out of pocket by the composition dealer. They cannot charge GST in the invoice.
Thus a composition dealer has to raise a Bill of Supply instead of a Tax Invoice. One more rule applicable on them is that the composition dealer has to mention the words ‘composition taxable person not eligible to collect taxes on supplies’ on the Bill of Supply.
2. Exporters
An exporter is also not required to charge GST on their invoice. This is because exports supplies are zero-rated. Hence a taxpayer exporting goods can issue a Bill of Supply in place of a tax invoice.
The dealer has to mention the following 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”
3. Exempted Goods Supplier
When registered dealer supplies exempt goods or services they are required to issue Bill of Supply.
For example, when a registered taxpayer provides unprocessed agricultural products they have to issue a Bill of Supply instead of a tax invoice.
What are the Contents of Bill of Supply ?
The GST law has not specified the format of Bill of Supply but it has specified certain particulars that should be present in a Bill of Supply.
These are the details a Bill of Supply should have:
- Name, address and GSTIN of supplier.
- Bill of supply serial number (generated consecutively, unique for the financial year).
- Date of issue.
- If recipient is registered: name, address and GSTIN.
- HSN (for products) or SAC code (for services)
- Description of goods/services.
- Value of goods/services after discount or abatement.
- Signature of supplier.
For example, a fruit vendor would not be issuing a regular Tax Invoice on sale but raise a Bill of Supply for his customers.
When not to issue a bill of supply?
Following are the Cases when a Bill of Supply will not be issued :
- If the value of the supply is less than Rs. 200 (unless the receiver wants the bill of supply)
- The recipient is not a registered person and the recipient does not require a bill of supply
What should a bill of supply for exports contain?
A bill of supply for exports should also include a declaration regarding payment of GST Depending on the payment of IGST the following text should appear:
If IGST has been paid for the exports:
“Supply Meant For Export On Payment Of IGST”.
If IGST has not been paid yet for the exports:
“Supply Meant For Export Under Bond Or Letter Of Undertaking Without Payment Of IGST”
Bill of Supply for exports shall also contain:
- Name and address of the buyer
- Delivery address
- Destination country
- Number and date of application for removal of goods for export.
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