What is a Bill of Supply under GST?
As per the GST laws, every registered person is required to issue tax invoice in respect of supply of goods or services by them. The tax invoice consists of details of the buyer including its address & value of goods/ services supplied, applicable tax rate & tax amount thereon. However, in certain cases, businesses cannot charge tax on invoice value. One of such examples is exempted goods.
Therefore, the GST law itself has allowed relaxation from issuance of “Tax Invoice” in such cases. In the cases where tax invoice is not issued, the registered person will have to issue a “Bill of Supply” for supply of goods or services by him. You might be interested in knowing when a “Bill of Supply” is issued and what are the particulars of “Bill of Supply”. Continue Reading….
What is a Bill of Supply?
Bill of Supply is a document issued in place of tax invoice where a registered person is supplying exempted goods or services or both or a registered person is paying tax under composition scheme. In both the cases, the registered person cannot charge tax on the value of goods or services supplied by him. Thus, he cannot issue an invoice showing the tax rate and tax amount on invoice value.
Bill of supply issued by registered person does not contain the details relating to tax rate and tax amount. Further, the value mentioned in the Bill of Supply is simply “Invoice Value” & not “Taxable Value”.
What is the format (Contents) of a Bill of Supply?
According to Rule 49 of the CGST Rules, a Bill of Supply shall be issued by the supplier containing the following details:
- Name, address and GSTIN of the supplier
- Unique Invoice Serial Number (not exceeding 16 characters), unique for a financial year
- Date of issuing invoice
- Name & address of the recipient (buyer)
- GSTIN or UIN of the buyer (if registered)
- HSN code of goods or SAC of services
- Description of goods or services supplied by the supplier
- Value of supply of goods or services or both after taking into account discount or abatement, if any; and
- Signature or digital signature of the supplier or his authorised representative
Is Bill of Supply required to be signed by the supplier?
Yes, the Bill of Supply needs to be signed or digitally signed by the supplier or his authorized representative. However, a relaxation is provided that when a “Bill of Supply” is issued digitally or electronically then there is no requirement of signature or digital signature.
You might have come across the invoices which carry a line at its bottom: “This is a computer-generated invoice and does not require signature”.
Who is required to issue a Bill of Supply?
In the following cases, a Bill of Supply is required to be issued by a registered person under GST:
- Composition Dealer: In order to simplify GST compliances, the Government has introduced a composition scheme for small traders having turnover below Rs. 1.50 crores (Rs. 75 Lakhs in special category states). Under this scheme, a registered person is required to pay tax at a prescribed rate on its turnover value without benefit of input tax credit. A person registered under composition scheme cannot charge GST in invoice. Therefore, he is not allowed to issue a tax invoice and is obliged to issue a bill of supply in place of tax invoice.
- Supplier of exempted goods or services: According to section 31(3) of the CGST Act, any registered person who is supplying exempted goods or services shall issue a Bill of Supply instead of Tax Invoice.
- Exporters: Export supplies are nil rated under GST. Hence, a registered person who makes export of goods or services shall issue a “Bill of Supply” instead of “Tax Invoice”. However, the exporter is required to mention the following in the Bill of Supply:
“Supply meant for export under bond or Letter of Undertaking without payment of IGST”
Following details are to be mentioned in a bill of supply of export:
- Name & address of the recipient
- Address of delivery
- Name of the destination country
What are the relaxations in case of Bill of Supply?
- Consolidated Bill of Supply in B2C Supplies: A registered person may not issue a bill of Supply if the value of goods or services or both supplied is less than Rs. 200. In such case, he shall issue a Consolidated Bill of Supply for all such supplies at day end. Please note that the above relaxation is available only when:
(a) The buyer (recipient) is not a registered person (B2C Supplies)
(b) The recipient does not require such invoice
Note: The supplier engaged in making supply of services by way of exhibition of cinematograph films in multiplex screens is not allowed to issue a consolidated bill of supply.
- Deemed Bill of Supply: In case of non-taxable supply (like petroleum, alcoholic liquor), tax invoice or other documents issued under any other Act shall be considered as Bill of Supply. It means where invoice is issued for these items already under other Acts, there is no need to issue Bill of Supply separately under GST. Such invoice will be deemed to be Bill of Supply for the purposes of GST.
- No need of signature or digital signature in case of digital or electronic Bill of Supply
Is HSN code mandatory in case of a Bill of Supply?
Yes, it is compulsory to mention HSN code in the Bill of Supply like tax invoice.
Can Input tax credit be claimed on the basis of Bill of Supply?
Since, a Bill of Supply is issued only in respect of exempted goods or by a composition dealer, you cannot make a claim of ITC for goods or services received against a Bill of Supply.
Disclaimer: The above article is meant for educational purposes only and doesnot carry any legal or corroborative value. Taxwink is not responsible for any loss or damage caused to any person from use of this information. Readers therefore, are requested to act diligently and under consultation with any professional before applying information contained in this article. For user support mail at: support@taxwink.com
