GST

Bill of Supply under GST

16 Oct, 2020

In previous articles, we discussed the types of invoices under GST. In few cases under the GST regime, the supplier will not be required to charge GST, hence a bill of supply is to be issued and in this article, we will discuss the applicability of a bill of supply under GST. A bill of supply is different than a regular tax invoice.

A bill of supply is issued by a registered person when he or she is restricted to charge tax by GST law. A bill of supply can be issued in the case of a registered person supplying exempted goods or services or they have opted to pay GST under composition scheme. In the bill of supply, taxes cannot be collected from the purchaser of goods or services.

Legal View on Bill of Supply under GST

Under CHAPTER VII of CGST ACT, 2017 deals with tax invoice under GST. Section 31(3)(c) clearly mentions that if any person who has acquired GST Registration in India but is supplying exempted goods or services, then he is required to issue a bill of supply for such transaction.

A bill of supply is a proof of tax-free supply to a buyer of goods or services. A bill of supply is different than a regular tax invoice. The basic difference in a bill of supply is a tax component that does not exist. A bill of supply is merely proof of tax-free supply, nothing else. Hence, as a purchase, if you buy something by a bill of supply, you will not be entitled to claim any input tax credits.

What should be the required details in the Bill of Supply under GST?

It should have the following details:

Name, GSTIN, and Address of the supplier
Date of issue
Unique supply number
Description of goods or services
For registered recipient, GSTIN should be mentioned
HSN Code or SAC
Value of the goods or services after trade discount
Signature of the supplier or its authorized representative

READ IS INPUT TAX CREDIT (ITC) AN ABSOLUTE RIGHT? ANALYSIS & VIEW OF JUDICIARY

Is HSN Code Mandatory for the Bill of Supply Under GST?

Yes, HSN is mandatory for bill of supply subject to certain conditions:

HSN Code is not required for Turnover less than Rs. 15 Million in a Financial year
2 Digit HSN Code required for Turnover between Rs. 15 Million to Rs.50 Million In a financial year
4 Digit HSN Code required for turnover above Rs. 50 Million in a financial year

A bill of supply looks like under GST:

If IGST has been paid – A declaration has to be attached with bill of supply for goods by Payment of GST Supply of goods in this consignment Meant For Export On Payment Of IGST (Integrated Goods and Service Tax)

If IGST has been not been paid – Supply Meant for Export of goods Under Bond or Letter of Undertaking without Payment of IGST (Integrated Goods and Service Tax)

Details by the Supplier

Following details are required to be fulfilled by the supplier at the export of goods:

Name, address and contact details of the buyer;
Product description;
Destination country;
Unique Invoice Number and date of application for removal of goods for Export purpose.

When a bill of supply is not required to be issued

Bill of supply is not required to be issued if the value of supply is less than Rs. 200
The recipient is not a registered person under GST Act
The recipient does not wish to take such a copy of the bill of supply

The registered person shall issue one consolidated bill of supply for the supply made in the whole day by the end of the day. Under GST Act^[1], in case of taxpayers registered under composition scheme, the supplier can issue one consolidated invoice for the total transaction in a day.

READ An Explainer on Service Accounting Code (SAC) Under GST