A bill of supply may be issued by companies that have registered for GST instead of a tax invoice. Businesses that work with composition taxpayers and exempted goods use it.
A registered supplier is required by law to give the purchaser a tax invoice for each supply of taxable goods or services. Along with the price of the products or services, the GSTIN, and the name of the supplier’s company, the invoice also includes the tax rate applied to the specific transaction. However, some companies are not allowed to add taxes to the invoices they send. Thus, in order to verify the transaction, they must provide a bill of supply.
In other words, a bill of supply under GST is not relevant to a transaction or when a certain supplier is unable to collect GST from the client.
Keep reading to understand the concept of the Bill of Supply in detail.
What Do You Mean by a Bill of Supply?
When a registered person provides taxable products, services, or both and additionally charges GST to the consumer, a tax invoice is generated. As per bill of supply meaning, when a registered person supplies exempt items or services or both, or when a registered person is paying tax under the composition system, a bill of supply is issued rather than a tax invoice.
These people do not include information about the rate of tax and the amount of tax on the bill of supply they issue. In addition, the amount specified in the bill of supplies is not taxed.
Contents of the Bill of Supply
These details should be present in a bill of supply:
- Supplier’s identity, comprising their name, address, and GSTIN.
- Sequentially generated Bill of Supply number, limited to 16 characters and unique within each financial year.
- Issuance date.
- Purchaser’s details, including their name, address, and GSTIN, if applicable.
- HSN Code for goods or Accounting Code for services
- Detailed description of the goods or services provided
- Total value of the goods or services, adjusted for any discounts or reductions
- Supplier’s signature or digital signature for authentication.
Who Should Issue a Bill of Supply?
Now that you know what a bill of supply is, the registrants listed below should issue a bill of supply.
Composition Dealer
A taxpayer may choose the composition plan if their annual revenue is less than Rs. 1.5 crores (Rs. 75 lakhs for the north-eastern states and Uttarakhand). A dealer that chooses the composition system is not permitted to collect tax from their customers; instead, they must deposit tax on their receipts themselves. The composition dealer is required to pay the bill of supply in GST out of pocket.
GST cannot be added to the invoice. As a result, a composition dealer must issue a bill of supply rather than a tax invoice. On the Bill of Supply, the composition dealer must state that the customer is a “composition taxable person not eligible to collect taxes on supplies.”
Exporters
Additionally, a seller who exports is exempt from adding a bill of supply under GST to their invoice. This is due to the zero-rated status of export supply. Therefore, a taxpayer exporting goods may substitute a tax invoice for a bill of supplies. In their Bill of Supply, the dealer must include the following: “Supply Meant For Export On Payment Of IGST” and “Supply Meant For Export Under Bond Or Letter Of Undertaking Without Payment Of IGST.”
Exempted Goods Supplier
A registered dealer must issue a Bill of Supply whenever they get a supplier of exempt items or services. For instance, a registered taxpayer must submit a bill of supply in GST rather than a tax invoice when supplying raw agricultural products.
Bill of Supply Format Under GST
The supplier must provide a GST bill of supply in the following format:
- The supplier’s business name, address, and Goods and Services Tax Identification Number
- Sequentially numbered serial codes, not exceeding sixteen characters, are issued in one or multiple series, each unique within a fiscal year.
- Date of issuance.
- The recipient’s business name, address, and Goods and Services Tax Identification Number or Unique Identity Number (if registered)
- Harmonized System of Nomenclature Codes for the goods or services
- a detailed description of the goods or services, or both.
- The total value of the supply of goods or services, or both, accounting for any applicable discounts or reductions
- Authentication in the form of a signature or digital signature from the supplier or their authorized representative.
What are some relaxation in case of Bill of supply ?
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Value Less Than Rs. 200
A bill of supply need not be issued if the value of the products, services, or both is less than 200 rupees.
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Non-Requirement of Signature or Digital Signature
There is no need for a signature or digital signature when a bill of supply is issued digitally or electronically. We frequently come across bills with statements.” This is a computer-generated invoice. It does not require a signature.
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Relaxation of the Serial No. and Address of the Customer
Due to the high volume of transactions in the banking, insurance, and passenger transportation industries, taxpayers are not required to keep track of customers’ addresses and serial numbers.
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Deemed Bill of Supply
Tax invoices or other papers produced under any other statute will be regarded as bills of supply in the event of non-taxable supplies (such as petrol and alcoholic beverages).
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Consolidated Bill of Supply
If the buyer does not request one, a separate bill of supply is not necessary when the value of the products or services given is less than Rs. 1200. At the conclusion of each day, a combined bill of supply may be provided to each receiver separately.
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Invoice-Cum-Bill of Supply
A registered person can issue a single “invoice cum bill of supply” when they supply both taxable and exempt goods or services.
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Relaxation in the case of the HSN Code or SAC
HSN codes are 8 digits, whereas SAC codes are 6 digits. The number of digits in the HSN code listed below will get a relaxation:
Turnover |
|
| Less than Rs. 1.5 crore | HSN code not required |
| Between Rs.1.5 crore – Rs. 5 crore | 2-digit HSN |
| Above Rs. 5 crore | 4-digit HSN |
Conclusion
In conclusion, a bill of supply is issued in the case of registered persons who are exempt from tax or who operate under the composition system. It is one of the most crucial documents. To avoid any disputes, it is crucial to make sure that the Bill of Supply has all pertinent information.