Bill of supply vs tax invoice: what's the difference?
Updated · Sources linked below
Side by side
| Tax invoice | Bill of supply | |
|---|---|---|
| Who issues it | Regular GST-registered businesses | Composition dealers; sellers of exempt or nil-rated goods/services |
| GST charged | Yes, shown separately | No |
| Buyer can claim input tax credit | Yes | No |
| Governing rule | CGST Rule 46 | CGST Rule 49 |
| Special wording | — | Composition dealers: "composition taxable person, not eligible to collect tax on supplies" |
What a bill of supply must show
- Your name, address and GSTIN
- A serial number up to 16 characters, unique in the year, and the date
- The buyer's name, address and GSTIN if registered
- HSN or SAC, description and value
- Signature of you or your authorised person
Selling both taxable and exempt items?
A registered business that supplies both taxable and exempt items to an unregistered buyer can issue a single invoice-cum-bill of supply. Otherwise, use a tax invoice for taxable items and a bill of supply for exempt ones.
Questions people also ask
Can a composition dealer issue a tax invoice?
No. Composition dealers can't collect GST from buyers, so they issue a bill of supply with the composition wording.
Is GST payable on a bill of supply?
No tax is charged to the buyer. Composition dealers pay their tax at a flat rate on turnover from their own pocket.
Can my buyer claim ITC on a bill of supply?
No. Since no GST is charged on it, there's no input tax credit to claim.
Do unregistered businesses issue bills of supply?
No. Bills of supply are issued by registered businesses; unregistered sellers just give a cash memo or receipt.
Official sources
This guide explains the rules in plain words; it isn't legal or tax advice. Rules change, so check the sources or ask a Chartered Accountant for your situation.