Issue a tax invoice when you are a regular GST-registered supplier making a taxable supply, and a bill of supply when you are not allowed to charge GST on the supply, typically because it is exempt or because you are under the composition scheme. Exports confuse people because no IGST appears under LUT, but an export of services is zero-rated, not exempt, so a regular registered exporter normally issues a tax invoice (an export invoice) with the LUT wording, not a bill of supply.
Key takeaways
- Tax invoice: for taxable supplies by regular registered persons. It shows tax, or zero tax with a reason.
- Bill of supply: for supplies on which you cannot charge GST, such as exempt supplies, or for composition taxpayers.
- Zero-rated is not exempt. Exports under LUT carry no IGST but remain taxable supplies at a zero rate.
- Using a bill of supply for an export can muddy your zero-rating and any refund claim.
- Your EDF references invoice numbers. Use the same document for GST and the EDF.
The difference in one table
| Tax invoice | Bill of supply | |
|---|---|---|
| Who issues it | Regular GST-registered suppliers | Registered suppliers of exempt supplies; composition taxpayers |
| Shows GST? | Yes, or zero with a stated reason (such as LUT) | No tax charged |
| Recipient can claim input tax credit? | Yes, for domestic B2B where eligible | No |
| Typical use | Most domestic B2B and B2C sales; exports | Exempt services or goods; composition dealers' sales |
| Export of services | Normally the right document | Not normally used for zero-rated exports |
| Key wording for exports | "Supply meant for export under LUT without payment of IGST" | Not applicable |
Our glossary entries on the bill of supply and zero-rated supply explain each term.
Zero-rated is not the same as exempt
This is the source of most confusion.
- An exempt supply is outside the tax charge. You cannot charge GST on it, and generally you cannot claim input tax credit for inputs used in making it.
- A zero-rated supply is taxable, but at a rate of zero (or with IGST paid and refunded). Export of services is zero-rated under Section 16 of the IGST Act, which is why exporters can export under LUT without paying IGST and still claim credit or refunds of input tax.
Because exports are zero-rated, they belong on a tax invoice that shows nil IGST under LUT, or IGST charged if you export with payment of tax and claim a refund. Our explainer on zero-rated supply goes deeper.
Which document in which situation
| Your situation | Document | Notes |
|---|---|---|
| Regular GST-registered firm exporting services under LUT | Tax invoice (export invoice) | Nil IGST; LUT wording on the face |
| Regular GST-registered firm exporting with IGST paid | Tax invoice (export invoice) | IGST shown; refund claimed later |
| Regular GST-registered firm selling domestic taxable services | Tax invoice | CGST + SGST or IGST as applicable |
| Registered firm making a supply your CA confirms is exempt | Bill of supply | No tax charged |
| Composition taxpayer | Bill of supply | Composition rules restrict certain supplies; ask your CA before exporting |
| Not registered for GST | Neither in GST terms; a plain commercial invoice | You cannot issue a tax invoice without a GSTIN |
The last two rows deserve a pause. Composition schemes come with conditions that may affect whether and how you can make certain supplies, and an unregistered exporter's position depends on turnover and other factors. Confirm both with your CA before invoicing a foreign client. This is general information, not legal or tax advice.
A worked example
Saranga Consulting LLP in Bhubaneswar is a regular GST-registered firm. In December 2026 it:
- Invoiced a Canadian client CAD 8,000 for a supply chain review, under LUT.
- Invoiced a Cuttack manufacturer ₹3,50,000 plus GST for a similar review.
- Received a fee for a supply that its CA had confirmed was exempt.
Its documents:
| Supply | Document | Tax shown | On the EDF? |
|---|---|---|---|
| Canadian client | Tax invoice SC/26-27/EX/019 | IGST nil, LUT wording | Yes, Part 2B row |
| Cuttack client | Tax invoice SC/26-27/0144 | CGST + SGST | No |
| Exempt supply | Bill of supply SC/BOS/26-27/003 | None | No |
Saranga keeps a separate series for exports, domestic tax invoices and bills of supply. When its December EDF is prepared, due 30 January 2027, the export invoice number SC/26-27/EX/019 goes into Part 2B exactly as issued.
How the choice affects your EDF and refunds
The EDF lists invoices by number and date. It does not care what you call the document, but your GST records do, and the two must agree.
- If you issue a bill of supply for an export, your GST return may show it as an exempt or non-GST supply rather than a zero-rated export. That can undermine a refund claim for unused input tax credit and invite questions about whether the supply was really an export.
- If you issue a tax invoice under LUT, the invoice, the GST return entry and the EDF row all tell the same story: a zero-rated export.
Use our free export invoice generator for exports, and the GST invoice generator for domestic taxable supplies.
Common mistakes
"No tax, so bill of supply." The absence of IGST under LUT does not make an export exempt.
Mixing series. Using the same number series for tax invoices and bills of supply makes reconciliation harder. Keep them separate.
Forgetting LUT wording. A tax invoice for an export under LUT should say "Supply meant for export under LUT without payment of IGST".
Issuing a tax invoice without registration. Only registered persons can issue tax invoices. If you are not registered, talk to your CA about whether you should be.
Frequently asked questions
Should I issue a bill of supply for export of services?
Normally no. Export of services is a zero-rated supply, not an exempt one, so a regular registered exporter issues a tax invoice showing nil IGST under LUT, or IGST paid if exporting with payment of tax. Check unusual cases with your CA.
What is the main difference between a tax invoice and a bill of supply?
A tax invoice is issued for taxable supplies and shows the GST charged, or zero with a reason. A bill of supply is issued where no GST can be charged, such as exempt supplies or sales by composition taxpayers, and the recipient cannot claim input tax credit on it.
Is zero-rated the same as exempt under GST?
No. Zero-rated supplies, including exports, are taxable at a zero rate and allow input tax credit or refunds. Exempt supplies are outside the tax charge, and input tax credit is generally not available for them.
Can a composition taxpayer export services?
Composition schemes carry conditions on the kinds of supplies you can make. If you are under composition and want to take on foreign clients, ask your CA whether that is permitted and what you would need to change.
Does the type of invoice matter for the EDF?
The EDF lists invoice numbers and dates, so it works with whatever document you issue. But your GST records should show the supply as a zero-rated export, which is why a tax invoice with LUT wording is the usual choice.
Bottom line
For exports, the zero-rate is the clue: a tax invoice with LUT wording keeps your GST return, refund position and EDF aligned. Create one with our free export invoice generator, and save bills of supply for genuinely exempt supplies.
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.