What is a bill of supply?
A bill of supply is issued in cases where taxes cannot be charged on the goods or services sold. As a bill of supply is issued instead of a regular tax invoice, the time limits pertaining to issuing invoices apply to the bill of supply as well.
When is a bill of supply issued?
Bill of supply is issued in the following cases:
- When composition dealers make a sale. If you are registered under the composition scheme, you will be unable to collect GST from customers, claim ITC, or issue tax invoices.
- When a business is involved in selling GST exempt goods or services.
Exporters should issue bills of supply, since exporting goods is zero-rated under the GST regime.
When is a bill of supply not required?
A bill of supply is not required when:
The recipient is not registered under GST.
The total value of the supply is less than Rs. 200.
Format of a bill of supply:
Based on the rules prescribed by the Government, here is what a sample bill of supply will look like in the GST regime:
- The header contains the logo, name, GSTIN, and address of your organization.
- In the next section, you will have to add some basic details about the supply:
- a. Bill of supply number: This number should be generated consecutively and should be unique.
- b. Date of issue, state in which the bill is issued, and the state code (the first 2 digits of the GSTIN).
- Under the Bill to Party section, enter the name, address, GSTIN, state, and state code of the recipient (purchaser).
- Under the Ship to Party section, enter the name, address, GSTIN, state, and state code of the recipient of the shipped goods.
NOTE: If the recipient is not registered under GST, it’s mandatory to mention the name, address and place of supply on the bill of supply for transactions worth over Rs. 50,000.
- The final section will contain details on the product description, HSN/SAC code, unit of measure (piece/kg), quantity and rate of the product (per item), amount of the product, and any discount offered. The value of supply is then calculated and entered both in number and words.
- The next section contains your bank details: bank account number, bank IFSC code, and any terms and conditions that are followed by your firm.
- Finally, the bill of supply is attested with the seal of the firm and an authorized signature.