Bill of supply, explained

When a bill of supply is used

A registered person issues a bill of supply instead of a tax invoice in two main cases: when supplying exempt goods or services, and when registered under the composition scheme, where GST cannot be charged separately on the bill.

Because no tax is charged, a bill of supply does not support input tax credit for the buyer — there is no GST on it to claim.

How it differs from a tax invoice

A tax invoice charges GST and shows the tax split; a bill of supply does neither. Otherwise it carries similar identifying details — the supplier, the buyer, a serial number, and a description of what is supplied.

A business can end up issuing both: a tax invoice for taxable supplies and a bill of supply for exempt ones, depending on what it is selling.

How Lekha records a bill of supply

Lekha records what your documents say and tracks the money on both sides, keeping a bill of supply in the same two-sided ledger as your tax invoices, so every sale is recorded whether or not it carries tax.

Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.

Questions

What is a bill of supply?

A document issued where no GST is charged separately — for exempt supplies and by composition dealers. It carries no tax amount.

Can a buyer claim input tax credit on a bill of supply?

No. A bill of supply carries no GST, so there is nothing to claim as input tax credit.

When do I issue a bill of supply instead of a tax invoice?

For exempt supplies, and when you are registered under the composition scheme and cannot charge GST separately.

This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.

Keep reading

• The GST composition scheme, explained
• Nil-rated, exempt and zero-rated supplies
• See how Lekha works
• All Lekha guides