A bill of supply records a sale on which no GST is charged to the buyer. Section 31(3)(c) of the CGST Act and rule 49 of the CGST Rules require it in two cases:
- the goods or services are exempt from GST, such as fresh vegetables, unbranded rice in loose form or many health and education services;
- the seller is under the composition scheme.
What it shows
Most of what a tax invoice shows, such as the seller's GSTIN, a serial number, the date, buyer details, HSN or SAC and value, but without any tax lines. A composition dealer must print the words "composition taxable person" on it, with a line saying it cannot collect tax on supplies.
Mixed sales
A shop that sells both taxable and exempt goods to an unregistered customer can issue one invoice-cum-bill of supply covering both. A bill of supply need not be issued for a sale below ₹200 to an unregistered buyer who does not ask for one, provided a daily summary is kept.
Why the difference matters
The buyer cannot claim any input tax credit on a bill of supply, which is why business buyers check the document type before they order from a composition supplier.