As per GST law, for every supply of taxable goods or services, a registered supplier is required to provide a tax invoice to the Purchaser. The invoice consists of Tax rate charged on the given transaction along with the cost of the goods/services, GSTIN and name of the supplier’s business. However, some businesses GST cannot charge any tax on the invoice issued by them and thus to validate the transaction have to issue a Bill of Supply.
In other words, in the case where GST is not applicable on a transaction or a given supplier cannot collect GST from the customer, Bill of Supply is issued.
Bill of Supply
- A bill of supply should consist of the following particulars.
- Name, address, and GSTIN of the supplier
- Bill of Supply number (it must not exceed 16 characters, be generated consecutively and each Bill of Supply will have a unique number for that financial year)
- Date of issue
- Name, address, and GSTIN of the purchaser (in case purchaser is registered)
- HSN Code of goods or Accounting Code for services.
- Description of goods/services
- Value of the goods/services after adjusting any discount or abatement
- A signature or Digital Signature of the supplier
Who can issue Bill of Supply
Under GST, the following businesses are required to issue Bill of Supply
A. Composition Dealer
In order to simplify business and GST compliance for small businesses (turnover below 1.5 crores* (Rs. 75 Lakhs for North-Eastern states and Hills states)), the government have made provisions for businesses to opt in for Composition Scheme. A supplier registered under composition scheme has to deposit tax on their receipts themselves, thus they cannot collect any tax from the purchaser of the goods/services.
Since a person cannot collect tax on his/her transactions, he cannot issue a tax invoice. Thus, a composition supplier is required to issue a bill of supply. The Composition supplier is required to mention ‘composition taxable person not eligible to collect taxes on supplies’ on the Bill of Supply.
* As per Notification 14/2019-Central Tax dt. 07-Mar-2019, the threshold limit of composition scheme has been increased w.e.f. April 1, 2019.
Export supplies are zero-rated, hence an exporter is not required to charge GST on their invoice. Thus. For a registered taxpayer exporting goods can issue a Bill of Supply in place of a tax invoice.
However, the exporter is required to mention the following in their Bill of Supply-
- “Supply Meant For Export on Payment of IGST”
- “Supply Meant For Export under Bond or Letter of Undertaking without Payment of IGST”
C. Exempted Goods Supplier
The CBIC has issued a list of goods and services that are exempted from GST. When such goods or services are supplied by a registered supplier, a bill of supply is issued instead of a tax invoice.
For instance, when a registered taxpayer supplies handloom, they have to issue a Bill of Supply instead of a tax invoice.
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