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Bill of Supply

What is a Bill of Supply?

A Bill of Supply is a document issued by a GST-registered business instead of a tax invoice when GST is not applicable to a transaction. It is used by composition scheme dealers and for the supply of GST-exempt goods or services, since no tax is charged in these cases.

When is a Bill of Supply issued?

A Bill of Supply is issued when a GST-registered business supplies goods or services on which GST is not applicable. This typically includes transactions involving GST-exempt supplies or businesses operating under the Composition Scheme, where tax cannot be charged on invoices.

For example, when a fruit vendor sells fresh fruits (which are exempt from GST), they do not issue a regular Tax Invoice. Instead, they raise a Bill of Supply to record the transaction, maintain proper documentation, and stay compliant with GST regulations. This ensures accurate accounting and legal compliance, even when no tax is collected from the customer.

Also, in cases where a business is registered under the one do issue only a Bill of Supply and not Tax Invoices to their customers as they can not charge GST on their sales transactions.

Enabling Bill of Supply

Zoho ERP lets you create a Bill of Supply for transactions where tax isn’t charged or when the customer pays the tax under reverse charge. Enabling this helps you stay compliant and record these transactions correctly.

Prerequisites:

While setting up taxes for your organization, check the Enable Reverse Charge in Sales Transactions box. This lets you create a bill of supply when the customer is responsible for paying the tax.

Here’s how you can do it:

  • Go to Settings on the top right corner.
  • Navigate to Taxes under Taxes & Compliance.
  • Select the required GSTIN from GST Settings.
  • Scroll to Reverse Charge and check the Enable Reverse Charge in Sales transactions box and click Save.

Once you have enabled reverse charge for your organization, you can enable the Bill of Supply module.

Here’s how:

  • Go to Settings on the top right corner of the page.
  • Select Configure Modules under Setup & Configurations.
  • Check the Bill of Supply option to enable it.
  • Click Save.

Once enabled, you can start creating bill of supply for your customers.

Creating a Bill of Supply

To create a new Bill of Supply,

  • Go to the Sales module of the left side bar.
  • Select Invoices from the Invoices dropdown.
  • Click the dropdown near the + New button and select New Bill of Supply
  • Select the Customer Name and verify the auto-populated details.
  • Add/edit the other necessary fields on the page.
  • You can now Save and Send them to your customers.
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