A bill of supply is the GST document you issue instead of a tax invoice when you cannot charge GST on a sale. The two common cases are composition taxpayers, who are not allowed to collect tax from customers, and registered businesses making exempt supplies. It looks much like an invoice, but it carries no tax columns and, for composition dealers, a statement that tax cannot be collected.
Key takeaways
- Issue a bill of supply when GST cannot be charged: as a composition taxpayer, or for exempt supplies.
- It carries the usual invoice details (supplier, recipient, number, date, description, value) but no GST rate or tax amount.
- Composition taxpayers should state on the document that they are a composition taxable person not eligible to collect tax. Confirm the exact wording with your CA.
- Service exporters under LUT normally issue a tax invoice with the LUT wording, not a bill of supply.
- The CGST Rules set the required particulars. Treat any template, including ours, as a starting point to check with your CA.
Bill of supply versus tax invoice
| Point | Tax invoice | Bill of supply |
|---|---|---|
| Who issues it | Registered person making taxable supplies | Composition taxpayer, or registered person making exempt supplies |
| GST shown | Rate and amount (CGST/SGST or IGST) | None |
| Customer can claim input tax credit | Yes, if conditions are met | No |
| Typical users | Most businesses, including exporters under LUT | Small traders under composition, exempt service providers |
| Special statement | LUT wording for exports without IGST | Composition statement where applicable |
Our article on tax invoice versus bill of supply explains the choice in more depth.
Who issues a bill of supply
Composition taxpayers
The composition scheme lets eligible small businesses pay tax at a fixed rate on turnover instead of charging GST invoice by invoice. The trade-off: they cannot collect tax from customers or pass on input tax credit. So instead of a tax invoice, they issue a bill of supply. The document should carry a statement that the supplier is a composition taxable person not eligible to collect tax on supplies, and it is sensible to show this prominently at the top.
Registered businesses making exempt supplies
Some goods and services are exempt from GST. A registered business that makes an exempt supply cannot charge tax on it, so it issues a bill of supply for that sale. If the same business also makes taxable supplies, it issues tax invoices for those. Where a single sale to an unregistered customer includes both taxable and exempt items, the rules allow a combined document; ask your CA how to format it.
What a bill of supply usually contains
The CGST Rules list the particulars. In practice, a well-made bill of supply shows:
| Field | Example |
|---|---|
| Supplier name, address and GSTIN | Gulmohar Stationers, Indore, GSTIN [number] |
| Document title | "Bill of Supply" |
| Serial number | BOS/26-27/0362 (unique, consecutive, within the financial year) |
| Date of issue | 22 September 2026 |
| Recipient name and address | Pathfinder Coaching Centre, Indore |
| Recipient GSTIN, if registered | [GSTIN or "Unregistered"] |
| HSN or SAC code | Code for each item |
| Description | Notebooks, A4, 200 pages |
| Quantity and value | 150 units, ₹18,750 |
| Total value | ₹18,750, in figures and words |
| Composition statement (if applicable) | "Composition taxable person, not eligible to collect tax on supplies" |
| Signature | Supplier or authorised representative |
Notice what is missing: no GST rate, no CGST/SGST/IGST columns, no tax total. If your template has tax columns, remove them rather than filling them with zeros, so the document cannot be confused with a tax invoice.
Use the SAC code finder to look up service codes and the amount in words converter for the total.
Sample layout
BILL OF SUPPLY Composition taxable person, not eligible to collect tax on supplies
Gulmohar Stationers [Address], Indore 452001 | GSTIN: [GSTIN]
Bill no.: BOS/26-27/0362 Date: 22 September 2026
Billed to: Pathfinder Coaching Centre, [Address], Indore (Unregistered)
Sr Description HSN Qty Rate (₹) Amount (₹) 1 Notebooks, A4, 200 pages [HSN] 150 95 14,250 2 Ball pens, blue, box of 10 [HSN] 30 150 4,500 Total: ₹18,750 (Rupees Eighteen Thousand Seven Hundred Fifty Only)
For Gulmohar Stationers (Signature)
Why service exporters rarely need one
Exporters of services often ask whether an export invoice without GST is a bill of supply. Usually it is not. Export of services is a zero-rated supply under Section 16 of the IGST Act, which is a taxable supply at a zero effective rate, not an exempt one. Most exporters issue a tax invoice under LUT carrying the wording "Supply meant for export under LUT without payment of IGST", or charge IGST and claim a refund.
So a design studio in Pune billing a client in London would typically use an export tax invoice, not a bill of supply. If your situation is unusual, for example you make both exempt domestic supplies and exports, ask your CA which document fits each sale. Our export invoice generator produces the standard LUT format, and the GST invoice generator covers domestic tax invoices.
Worked example: one business, two documents
Pathfinder Coaching Centre's supplier, Gulmohar Stationers, is under the composition scheme. Every sale it makes, to students, schools or coaching centres, goes on a bill of supply with the composition statement. Its customers cannot claim input tax credit on these purchases.
A different business, Mandovi Health Clinic, Goa, is a regular registered taxpayer. Its healthcare consultations may be exempt, so it issues bills of supply for those, while its sale of branded wellness products, which are taxable, goes on tax invoices. The clinic keeps separate number series for the two documents so neither has gaps.
This is general information, not legal or tax advice. Exemption status and composition eligibility depend on current GST notifications and your facts.
Frequently asked questions
What is a bill of supply under GST?
It is the document a registered person issues instead of a tax invoice when no GST can be charged, typically by composition taxpayers or for exempt supplies. It carries the usual invoice details but no tax rate or tax amount.
Who should issue a bill of supply?
Composition taxpayers for their sales, and regular registered businesses for supplies that are exempt from GST. For taxable supplies, a regular registered business issues a tax invoice instead.
Can a customer claim input tax credit on a bill of supply?
No. Because no GST is charged on a bill of supply, there is no tax for the customer to claim as credit.
Should an export invoice under LUT be a bill of supply?
Usually not. Export of services is a zero-rated supply, not an exempt one, so exporters normally issue a tax invoice with the LUT wording. Ask your CA if your case is unusual.
Do bills of supply need a separate number series?
It is good practice to keep a separate, consecutive series for bills of supply within each financial year, distinct from tax invoices, so there are no gaps or duplicates in either.
Bottom line
Use a bill of supply only when you genuinely cannot charge GST, and keep it free of tax columns. For taxable domestic sales, create a proper tax invoice with the free GST invoice generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.