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In India, a registered supplier generally issues a tax invoice for a taxable supply, but a bill of supply for an exempt supply or a supply made under the composition scheme. These are not interchangeable formats: the correct document depends on the supply’s GST treatment and, where relevant, the supplier’s tax status. A tax invoice shows applicable GST; a bill of supply identifies the transaction without charging GST on the document.
The Central Goods and Services Tax Act, 2017 (CGST Act), its rules and applicable notifications govern the details. State or Union Territory GST provisions may also matter. Use this guide for the general distinction and checks; confirm the current rules for your transaction and taxpayer category.
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How do I decide which GST document to issue?
Start with the legal treatment of the supply, not the buyer’s preferred document label. A registered supplier making a taxable supply generally issues a tax invoice. A registered supplier making an exempt supply, or a supplier paying tax under the composition scheme, generally issues a bill of supply, subject to statutory and prescribed exceptions.
- Identify the supply. Establish whether the transaction is taxable or exempt under the applicable GST treatment. Consider what is being supplied and the transaction’s facts rather than relying only on the wording used in a purchase order or accounting system.
- Check the supplier’s status. Determine whether the supplier is under the composition scheme or another category with a special invoicing rule. The supplier’s status can affect the document required even when a buyer asks for a particular format.
- Apply the document rule. Use a tax invoice for the ordinary taxable-supply case; use a bill of supply for the ordinary exempt-supply or composition-scheme case.
- Check for an exception. Review the relevant provision, current rules and notifications for the transaction, including any e-invoice or sector-specific requirement.
This is not a free choice between two invoice templates. The classification determines what the document is meant to represent: a tax invoice records GST charged, while a bill of supply records a transaction for which GST is not charged on that document. If a customer requests a bill of supply for a taxable supply, or a tax invoice for an exempt or composition-scheme supply, the request does not by itself change the legal treatment.
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Exempt supplies and zero-rated exports should not be treated as the same category. Export invoices have specific endorsement and destination-related particulars under Rule 46. The correct treatment depends on the transaction and the applicable rule; do not assume that an export should be documented as an ordinary exempt supply.
What is the difference between a tax invoice and a bill of supply?
A tax invoice records GST charged on a taxable supply. A bill of supply records an applicable exempt or composition-scheme transaction without showing a GST rate or tax amount as tax charged on that document. The document’s purpose, tax fields and potential use by a recipient therefore differ, even though both identify the supplier and transaction.
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| Decision point | Tax invoice | Bill of supply |
|---|---|---|
| Typical use | Taxable supply by a registered supplier | Exempt supply or supply by a composition taxpayer, subject to rules |
| GST rate and amount | Shows the applicable rate and tax amount | Does not show a tax rate or tax amount as tax charged on the document |
| Party and transaction identification | Supplier, invoice number and date, and recipient details as applicable | Supplier, bill number and date, and recipient details as applicable |
| Supply particulars | Description, quantity for goods, value, tax particulars and other prescribed details | HSN or Accounting Code, description, value after discount or abatement, and other prescribed details |
| Key review | Check taxable treatment, tax particulars and any special fields | Check exempt or composition treatment and required bill particulars |
| Recipient’s credit documentation | A section 31 invoice is among the documents identified in the ITC rules, subject to the applicable conditions | Not the ordinary tax-charging supplier invoice used for a taxable purchase |
The table describes the general distinction, not every transaction-specific rule. The CGST Act, CGST Rules and applicable notifications control the particular case. Recipient details, special endorsements, timing and other particulars may vary with the transaction.
What information must a tax invoice contain?
Rule 46 of the CGST Rules sets out tax-invoice particulars. The fields depend on the transaction, so treat this as a working checklist rather than a complete rule for every supply. The invoice should let the parties and a reviewer identify who supplied what, when it was invoiced, how the value was determined and what tax was charged.
Supplier, number and date
- Supplier’s name, address and GSTIN.
- A consecutive serial number unique for the financial year.
- The date of issue.
Keep the numbering sequence consistent with the supplier’s records and make sure it meets the financial-year uniqueness requirement. Do not reuse a number in a way that undermines the required consecutive series. The number and date are basic transaction identifiers, so errors here can make reconciliation and document review harder even when the supply details are otherwise correct.
Recipient and delivery details
- For a registered recipient, the recipient’s name, address and GSTIN or UIN, as applicable.
- For specified transactions with an unregistered recipient at or above the prescribed threshold, the recipient and delivery particulars required by the rule.
- Delivery address where relevant. For an inter-State supply, include the place of supply particulars required by the rule.
Recipient fields are not identical in every case. The requirements depend on whether the recipient is registered and, for specified unregistered-recipient transactions, whether the stated threshold and other rule conditions apply. Check the current Rule 46 wording instead of assuming that every invoice to an unregistered person needs the same information or that recipient particulars can always be omitted.
What was supplied and its value
- HSN for goods or the Accounting Code for services, as applicable.
- A description of the goods or services.
- For goods, quantity and the unit or Unique Quantity Code.
- The value and taxable value after applicable discounts or abatements.
Describe the supply clearly enough to connect the invoice to the transaction. For goods, quantity and unit details help distinguish the item and amount supplied. Show the value and taxable value after applicable discounts or abatements as required. Avoid treating the gross amount, taxable value and tax amount as if they were interchangeable figures.
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Tax and transaction-specific fields
- The applicable tax rate and tax amount.
- An indication where tax is payable on a reverse-charge basis, when applicable.
- For exports, the required export endorsement and destination-related details.
- The supplier’s signature or digital signature, subject to the rule’s exceptions.
The applicable tax fields are central to the difference between the documents: a tax invoice shows the rate and amount charged, subject to the relevant treatment. For an inter-State supply, place-of-supply particulars are relevant; delivery details may also be required. Reverse charge and exports call for attention to their particular indicators or endorsements. These are not decorative template fields: they communicate how the transaction is being treated.
Some notified classes of taxpayers, including taxpayers covered by e-invoice requirements, have additional process obligations. A general checklist cannot establish whether a specific supplier or invoice is covered. Check the current Rule 46 text and notifications for the supplier class and transaction. E-invoicing is an additional compliance question; it does not replace deciding whether the underlying transaction calls for a tax invoice or bill of supply.
What information must a bill of supply contain?
Rule 49 generally requires a bill of supply to identify the supplier and transaction, but it does not show a GST rate or tax amount as tax charged on the document. The CBIC’s FAQ describes this distinction. A bill should not be treated as a tax invoice with its tax fields merely left blank: it represents a different applicable treatment.
- Supplier’s name, address and GSTIN.
- A consecutive serial number unique for the financial year.
- Date of issue.
- Recipient details as applicable.
- HSN or Accounting Code, as applicable.
- Description of the goods or services.
- Value after discount or abatement.
- Supplier signature or digital signature, subject to rule-based exceptions.
As with a tax invoice, the supplier identity and unique number help trace the document to the supplier’s records. The description, code and value help identify the supply. The required value is stated after discount or abatement where applicable. The recipient details depend on the circumstances, so a supplier should not assume that every bill of supply has the same recipient fields.
Some bill-of-supply provisions draw on relevant Rule 46 provisos. The precise requirements can therefore depend on the transaction and applicable exceptions. Verify the current Rule 49 text rather than assuming that every bill has identical fields. If a transaction involves an unusual recipient, delivery arrangement or other special feature, check the applicable rule rather than copying a standard bill template without review.
When must I issue the invoice?
Invoice timing differs for goods and services. Section 31 of the CGST Act sets the general goods rule, while the prescribed period for services is generally 30 days, with a 45-day period for specified insurance, banking and financial suppliers, subject to exceptions and special arrangements. These are general rules, not a substitute for checking the category-specific provision.
Taxable goods
If the supply involves movement of goods, the general deadline is before or at the time of removal. If movement is not involved, the invoice is generally due before or at delivery or making the goods available to the recipient. In practice, determine whether the transaction involves movement and identify the relevant removal, delivery or availability event. Do not select the deadline based only on when an internal accounting entry is posted.
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Taxable services
The general period is within 30 days from the date of supply of the service. Specified suppliers in insurance, banking and financial services generally have 45 days. Special arrangements or extensions can apply, so check the relevant rule where the supplier or service falls into a special category. The 45-day period is not a general extension for every service provider; it applies to the specified categories described by the rules.
Transactions with special timing rules
Continuous supplies, reverse-charge transactions, exports, goods supplied on approval and notified categories can have different requirements. Do not apply the ordinary goods or services deadline to one of these cases without checking the governing provision and current rules. The correct document and the deadline are related but distinct checks: first determine the applicable document, then establish the timing rule for that type of supply and transaction.
Can I skip an individual invoice for a supply below ₹200?
Only in a limited situation. Section 31 permits a registered supplier, subject to prescribed conditions, not to issue an individual invoice for a supply below ₹200. CBIC’s explanation specifies that the recipient must be unregistered and must not ask for an invoice; the supplier must issue a consolidated tax invoice at the end of the day for the covered supplies.
The threshold is not a general exemption from invoicing, and it does not mean a supplier may omit a requested invoice or apply the exception without checking its conditions. In particular, the value being below ₹200 is not enough on its own: the recipient’s registration status and whether the recipient asks for an invoice matter, and the day-end consolidated invoice requirement remains part of the described exception. Confirm the current prescribed requirements before relying on it.
Does a bill of supply allow the buyer to claim input tax credit?
A bill of supply is not the ordinary tax-charging supplier invoice used to substantiate input tax credit for a taxable purchase. CBIC’s input-tax-credit rules identify an invoice issued under section 31 and a debit note among the documentary bases for credit, alongside other specified documents.
Possessing a document alone does not guarantee eligibility. The buyer must meet the other conditions in the Act and Rules, and the transaction’s actual tax treatment matters. If a purchase is represented as taxable but the supplier provides a bill of supply, clarify the treatment with the supplier and check the applicable legal requirements rather than assuming the document supports ordinary input tax credit. Conversely, do not infer from the presence of a document labeled “invoice” alone that credit is available: the document and transaction must meet the applicable conditions.
What should a supplier check before issuing either document?
A short review before issuing the document can catch errors in the legal classification, timing or required particulars. A useful sequence is to establish the transaction’s treatment, confirm the supplier category, select the document, and then verify fields and timing against the applicable rule.
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- Confirm the basis for the document. Record whether the supply is taxable, exempt or being made by a composition taxpayer, and check any relevant exception. Do not let a customer’s preferred label substitute for this classification.
- Use a financial-year-unique serial number. Check that the sequence and date match the supplier’s records.
- Match fields to the transaction. Include recipient, delivery, supply, value and tax particulars that apply; do not copy fields from a different type of supply without checking the rule.
- Apply the correct deadline. Determine whether the transaction is goods, services or a category with a special timing rule.
- Check current notifications. Verify e-invoice coverage and any additional obligations for the taxpayer class or transaction.
- Keep the recipient’s use in view. Where the recipient expects input tax credit, ensure the transaction is correctly treated and documented; a document by itself does not establish entitlement.
- Review special transaction details. Check place of supply and delivery particulars where relevant, reverse-charge indication when applicable, and export endorsement and destination information for exports.
Common mistakes follow from skipping one of these checks: treating a bill of supply as a tax invoice without tax particulars; assuming the below-₹200 exception applies simply because the amount is small; using the ordinary service deadline for a special category; or confusing zero-rated exports with exempt supplies. A reusable template can help keep fields consistent, but it cannot determine the tax treatment or decide whether a notification applies.
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Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Frequently Asked Questions
What is the basic difference between a tax invoice and a bill of supply?
A tax invoice is generally used by a registered supplier for a taxable supply and shows the applicable GST rate and amount. A bill of supply is generally used for an exempt supply or a composition-scheme supply and does not show a tax rate or amount as tax charged on that document.
When should I issue a bill of supply?
Generally, a registered supplier issues a bill of supply for an exempt supply, and a supplier paying tax under the composition scheme uses a bill of supply for the applicable supplies. Check the current Act, Rules and notifications for exceptions and special categories.
Does a bill of supply show GST?
It does not show a GST rate or tax amount as tax charged on the document. It identifies the transaction and includes the prescribed supplier, recipient and supply particulars as applicable.
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No; the document follows the applicable GST treatment and supplier status, not the customer’s preferred label. If there is disagreement about the correct document, first resolve how the supply is classified under the applicable provisions.
Does every GST-registered business have to use e-invoicing?
The materials summarized here do not establish the current threshold or applicability for every taxpayer. E-invoice obligations apply to certain notified classes, so check the latest notification and your supplier category before issuing an invoice.
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Do exports count as exempt supplies for invoice purposes?
Do not assume so. The CGST invoice rule provides export-specific endorsement and destination particulars, and zero-rated exports should be distinguished from exempt supplies when deciding how to document a transaction.
Can I omit an invoice for a purchase below ₹200?
Only if the prescribed conditions are met. The described exception concerns a supply below ₹200 to an unregistered recipient who does not ask for an invoice, and calls for a consolidated tax invoice at the end of the day for covered supplies. The amount alone is not sufficient.
When is an invoice due for goods or services?
For taxable goods, the general rule is before or at removal when movement is involved, or before or at delivery or making the goods available otherwise. For services, the general prescribed period is 30 days, and 45 days applies to specified insurance, banking and financial suppliers, subject to special rules and exceptions.
Can a buyer claim input tax credit using a bill of supply?
A bill of supply is not the ordinary tax-charging supplier invoice used to substantiate input tax credit for a taxable purchase. The ITC rules identify a section 31 invoice and debit note among relevant documents, but eligibility also depends on the Act’s and Rules’ conditions and the transaction facts.
Where can I check the official GST invoice rules?
Use the current CGST Act and CGST Rules published by CBIC, along with the applicable notifications. In particular, section 31 addresses invoice obligations, while Rules 46 and 49 cover tax-invoice and bill-of-supply particulars.
The Bottom Line
Bottom line: Do not treat a tax invoice and a bill of supply as interchangeable formats. First determine whether the supply is taxable, exempt or made under the composition scheme; then apply the relevant document, particulars and timing rules. A tax invoice generally shows GST charged, while a bill of supply does not. Check current CBIC rules and notifications for special cases, e-invoice applicability and exceptions such as the conditional below-₹200 provision.
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