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Key takeaways
- A bill of supply is issued by a composition taxpayer or for exempt supplies. It carries no tax line.
- The buyer cannot claim input tax credit on it. A buyer should expect that when it deals with a composition supplier.
- A composition taxpayer writes that it is a composition taxable person not eligible to collect tax on supplies.
- Mixing a tax invoice and a bill of supply for different lines of one sale needs care. Ask your accountant.
Free PDF and Excel: Bill of supply template and buyer checklist. Get it below
What a bill of supply is
A bill of supply is a document a registered person issues for a supply on which no GST can be charged, either because the supplier is under the composition scheme or because the goods or services are exempt.
Procurement teams meet it when they buy from small suppliers who are in the composition scheme, or when buying exempt items. It looks like an invoice. It has a number, a date and an amount. What it does not have is tax. That is why it changes how you book the purchase: the whole amount goes to cost, because no input tax credit arises.
A buyer orders stationery worth INR 24,000 from a small trader under the composition scheme. The trader issues a bill of supply for INR 24,000 with a line at the top that it is a composition taxable person not eligible to collect tax on supplies.
The buyer books INR 24,000 as the expense. Had the trader been a normal registered supplier, the invoice would split the amount into value and tax, and the tax part would be recoverable credit.
What goes on it
| Field | What goes in it | Why it matters |
|---|---|---|
| Supplier name, address, GSTIN | The registered details. | Allows verification. |
| Serial number and date | Consecutive number and issue date. | Same discipline as tax invoices. |
| Recipient | Name, address and GSTIN if registered. | Aids the buyer's records. |
| Description and quantity | What was supplied. | Backs the amount. |
| Value | Total amount, with no tax line. | The whole amount is the cost. |
| Composition statement | For composition taxpayers: composition taxable person, not eligible to collect tax on supplies. | Tells the buyer why there is no tax. |
| Signature | Signature or digital signature. | Shows authorisation. |
Free PDF and Excel
Bill of supply template and buyer checklist
A bill of supply layout for composition suppliers and a checklist for buyers who receive one.
- Bill of supply layout
- Tax invoice versus bill of supply table
- Buyer receipt checklist
- Excel bill that totals the lines
Bill of supply versus tax invoice
| Point | Tax invoice | Bill of supply |
|---|---|---|
| Charges GST? | Yes | No |
| Who issues | Normal registered supplier for taxable supplies | Composition taxpayer or supplier of exempt goods |
| Buyer claims input credit? | Yes, if conditions are met | No |
| Tax line | Shown separately | None |
The tax invoice rules are on the GST tax invoice page. Where goods move without a sale, use a delivery challan.
Last checked: 19 October 2026. Reflects rule 49 of the CGST Rules and the composition scheme as summarised by published GST guides. Check the current text with your adviser.
Buyer-side traps
- Booking input credit on a bill of supply.
- Not recording that the supplier is under composition, then wondering why tax is missing.
- Paying tax that was never charged, based on an ERP default.
- Accepting a bill of supply from a supplier that is not entitled to issue one.
- Mixing exempt and taxable lines in one document.
- Supplier GSTIN is valid and the status is composition or exempt.
- Document carries the composition statement if relevant.
- No tax is booked as credit.
- Amount agrees with the purchase order.
- Document is filed with the vendor master note.
Frequently asked questions
Who can issue a bill of supply?
A registered person who is under the composition scheme, or who supplies exempt goods or services, instead of a tax invoice.
Can I claim input tax credit on a bill of supply?
No, because there is no tax charged on it.
What must a composition taxpayer write on the bill?
That it is a composition taxable person, not eligible to collect tax on supplies.
Is a bill of supply the same as a retail invoice?
No. A retail invoice is a form of tax invoice. A bill of supply has no tax on it.
Do I need a serial number on a bill of supply?
Yes, a consecutive serial number unique for the financial year is among the usual particulars.