Bill of Supply under Goods and Service – GST

Generally, the businesses registered under Goods and Service Tax (GST) are required to issue Tax invoices and mention the GST rate charged on it. But when businesses are not liable to charge GST they have to issue bill of supply.

A Bill of Supply is a document issued by businesses Registered under GST opting for composition scheme or dealing with exempted Goods. It means they will be issuing Bill of Supply in place of a Tax Invoice.

Therefore, in a nutshell, a Bill of Supply is issued when GST is not applicable on a supply or when GST is not to be charged from the customer.

Who are required to issue Bill of Supply?

The following registrants are required to issue Bill of Supply:

1. Composition Dealer

A taxpayer whose turnover is less than Rs 1 crore (75 lakh in case of special category states) can opt for composition scheme. They are not allowed to collect any tax from their buyers. A dealer opting for composition scheme has to deposit tax on their receipts themselves, they have to pay a certain percentage of their turnover as their GST. The GST has to be paid out of pocket by the composition dealer. They cannot charge GST in the invoice.

Thus a composition dealer has to raise a Bill of Supply instead of a Tax Invoice. One more rule applicable on them is that the composition dealer has to mention the words ‘composition taxable person not eligible to collect taxes on supplies’ on the Bill of Supply.

2. Exporters

An exporter is also not required to charge GST on their invoice. This is because exports supplies are zero-rated. Hence a taxpayer exporting goods can issue a Bill of Supply in place of a tax invoice.

The dealer has to mention the following in their Bill of Supply-"Supply Meant For Export On Payment Of IGST"or"Supply Meant For Export Under Bond Or Letter Of Undertaking Without Payment Of IGST"

3. Exempted Goods Supplier

When registered dealer supplies exempt goods or services they are required to issue Bill of Supply.

For example, when a registered taxpayer provides unprocessed agricultural products they have to issue a Bill of Supply instead of a tax invoice.

What are the Contents of Bill of Supply?When not to issue a bill of supply?What should a bill of supply for exports contain?

What If IGST has been paid for the exports?:

What if IGST has not been paid yet for the export?

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