What is the difference between a bill of supply and a tax invoice?

A tax invoice is issued when GST is charged on a sale. A bill of supply is issued when no GST is charged — for example by composition-scheme dealers or when selling GST-exempt goods. A bill of supply shows no tax and the buyer cannot claim input tax credit on it.

Who issues a bill of supply?

A bill of supply is issued by a registered person who cannot charge GST — mainly composition-scheme dealers and businesses supplying exempt or nil-rated goods or services.

Can a buyer claim input tax credit on a bill of supply?

No. Since no GST is charged on a bill of supply, there is no tax for the buyer to claim as input tax credit.

Does a bill of supply need an HSN code?

Yes. Like a tax invoice, a bill of supply should carry the HSN/SAC code, description, value and a unique serial number — it just doesn't show a GST rate or amount.

What is an invoice-cum-bill of supply?

When a registered person supplies both taxable and exempt goods to an unregistered buyer, GST allows a single combined document called an invoice-cum-bill of supply.

Bill of Supply vs Tax Invoice: What's the Difference?

Not every sale uses a tax invoice. When no GST is charged, businesses issue a bill of supply instead. If you’re unsure which one applies to you, this guide explains the difference in plain language.

What is a bill of supply?

A bill of supply is a billing document issued by a GST-registered business that cannot charge GST on a particular sale. It looks a lot like a tax invoice, but with one crucial difference: it shows no GST.

You issue a bill of supply when you are:

A composition-scheme dealer (you pay GST at a flat rate and can’t collect it from customers), or
Supplying exempt or nil-rated goods or services.

Because no tax is charged, the buyer cannot claim input tax credit on a bill of supply.

What is a tax invoice?

A tax invoice is the document you issue when you do charge GST — it shows the CGST/SGST or IGST, creates your tax liability, and lets the buyer claim input tax credit. (See What Is a Tax Invoice? for the full format.)

Bill of supply vs tax invoice: side by side

Aspect	Tax Invoice	Bill of Supply
GST charged?	Yes	No
Issued by	Regular GST-registered sellers	Composition dealers / exempt-goods sellers
Shows tax rate & amount?	Yes (CGST/SGST or IGST)	No
Input tax credit for buyer?	Yes	No
When used	Taxable supplies	Exempt supplies or composition scheme

When should you issue each?

Your situation	Document
You’re a regular dealer selling taxable goods	Tax invoice
You’re registered under the composition scheme	Bill of supply
You sell GST-exempt or nil-rated goods	Bill of supply
You sell both taxable and exempt goods to an unregistered buyer	Invoice-cum-bill of supply

What a bill of supply must contain

A bill of supply carries most of the same details as a tax invoice — just without the tax:

Your name, address and GSTIN
A unique, consecutive serial number (up to 16 characters)
The date of issue
Buyer’s details (and GSTIN, if registered)
HSN/SAC code and description of goods or services
The value of supply
Your signature or digital signature

Composition dealers must also mention that they are a “composition taxable person, not eligible to collect tax on supplies.”

Invoice-cum-bill of supply

What if a single sale includes both taxable and exempt items — to an unregistered buyer? GST lets you issue one combined document called an invoice-cum-bill of supply, so you don’t need two separate papers for the same transaction.

Let your billing tool pick the right one

You don’t have to remember these rules on every sale. In KhataBuddy, the software issues the correct document — a tax invoice when GST applies, or a bill of supply when it doesn’t — with the right fields and numbering. Try KhataBuddy free and bill correctly, whatever you sell.