Bill of Supply Under GST — When and How to Create

What is a Bill of Supply?

A bill of supply is an official document that looks like an invoice, but does not mention GST liability. Why? Because goods or services sold under a bill of supply are not subject to GST.

When do you use a bill of supply?

1. Composition Scheme Businesses: If you're registered under the composition scheme, you must issue a bill of supply, not a tax invoice.
2. Exempt Goods/Services: If you sell GST-exempt goods (such as books, basic food items, medicines), you issue a bill of supply.
3. Below Certain Thresholds: In some cases, small transactions may require a bill of supply.

Which Businesses Must Issue a Bill of Supply?

1. Composition Scheme Registered Businesses

Businesses registered under the composition scheme (small traders, manufacturers, some service providers) must:

• Pay GST at a fixed rate (1%, 2%, or 5% depending on category), but
• Not issue a tax invoice
• Issue a bill of supply instead
• Buyers cannot claim ITC

2. GST-Exempt Goods/Service Suppliers

Some goods and services are GST-exempt:

• Books, newspapers, magazines
• Basic food items (rice, wheat, flour, etc.)
• Medicines (without additives)
• Medical services by doctors
• Education services
• When you sell these, you issue a bill of supply

3. Small Sellers Below Threshold (In Some Cases)

If your turnover is below ₹20 lakh and you're not on the composition scheme, a bill of supply may still apply (depending on the nature of your business).

Bill of Supply Format — Mandatory Fields

A bill of supply must also follow GST Rule 47 and be in the proper format. Mandatory fields:

• Your legal name, address, GSTIN
• Buyer's name, address, GSTIN (if they're a business)
• Invoice number and date
• Place of supply (city/state)
• Item description
• HSN/SAC code (if applicable)
• Quantity and Value (WITHOUT tax)
• Total value (no tax added)
• Signature or authorized person's stamp

GSTBill.app supports all these fields. You can generate a bill of supply with just one click.

How to Generate a Bill of Supply?

On GSTBill.app:

1. Message "Bill of Supply" on WhatsApp
2. Enter your GSTIN
3. Add buyer information and items
4. GSTBill will automatically detect if a bill of supply is needed
5. Within 60 seconds, the PDF is ready — sent directly to WhatsApp

Or: You can download a free GST bill of supply format PDF and fill it manually (but it's a slower process).

Bill of Supply vs Tax Invoice — When to Use Each

CREATE A TAX INVOICE when:

• You're a normal GST-registered business
• You're selling taxable goods/services
• You want to give buyers the option to claim ITC
• It's a B2B or B2C sale — normal case

CREATE A BILL OF SUPPLY when:

• You're registered under the composition scheme
• You're selling GST-exempt goods/services
• You don't want buyers to claim ITC
• You're a small turnover seller (in some cases)

Bill of Supply as Proof in a GST Audit

If a GST officer audits you and asks "Why didn't you issue a tax invoice?", you can calmly explain:

• "My business is registered under the composition scheme" — the bill of supply is valid
• "These goods are exempt from GST" — the bill of supply is correct
• Show the bill of supply document — it's in GST-compliant format

Invoices generated by GSTBill.app comply with GST Rule 47. No issues!