India
Bill of supply format for composition dealers and exempt supplies
When to issue a bill of supply instead of a tax invoice, what it must show, the composition declaration, and a free bill of supply generator. No sign-up.
Last updated · Invoice Native team
Not every GST-registered business issues tax invoices. A composition dealer, and a regular registered seller making exempt supplies, issue a bill of supply instead: a document that looks like an invoice but charges no GST. This guide explains when a bill of supply is used, what it must contain, and the declaration composition dealers must print.
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Who issues a bill of supply
Under rule 49 of the CGST Rules, a registered person issues a bill of supply instead of a tax invoice when:
- They are registered under the composition scheme — for everything they sell; or
- They are selling exempt goods or services — for example unprocessed food grains, fresh vegetables, or healthcare and education services that GST exempts.
A regular seller who sells both taxable and exempt items to an unregistered buyer can issue a single invoice-cum-bill of supply, with GST on the taxable lines only.
A quick look at the composition scheme
The composition scheme lets small businesses pay GST as a flat percentage of turnover instead of charging it line by line:
| Who | Composition rate (CGST + SGST) | Turnover limit (previous year) |
|---|---|---|
| Manufacturers and traders | 1% | ₹1.5 crore (₹75 lakh in some special category states) |
| Restaurants (not serving alcohol) | 5% | ₹1.5 crore |
| Service providers (services scheme) | 6% | ₹50 lakh |
In return, composition dealers can't collect GST from customers, can't claim input tax credit, and can't make inter-state sales of goods. They file a quarterly statement (CMP-08) and an annual return (GSTR-4) instead of the monthly returns.
What a bill of supply must show
- Title: "Bill of Supply".
- Your name, address and GSTIN.
- A serial number of at most 16 characters — letters, digits,
-and/— unique for the financial year. - Date of issue.
- The buyer's name and address, and their GSTIN if they are registered.
- HSN or SAC code for each item, on the same basis as a tax invoice.
- Description, quantity and value of each item, after any discount.
- Signature of you or your authorised signatory.
What it doesn't have: GST rates, CGST, SGST or IGST amounts, a tax summary, or a reverse-charge line for tax charged.
The composition declaration
A composition dealer must also print, prominently at the top of every bill of supply:
Composition taxable person, not eligible to collect tax on supplies
The words "composition taxable person" also have to be displayed on a board at every place of business. Leaving the declaration off makes it look as though you are charging tax you can't collect, and buyers — and tax officers — notice.
Example
A composition-scheme bakery in Pune sells to a café:
| Field | What prints |
|---|---|
| Title | Bill of Supply |
| Declaration | Composition taxable person, not eligible to collect tax on supplies |
| Number and date | BOS/26-27/0142 · 29/09/2026 |
| Seller | Sunrise Bakers, Kothrud, Pune · GSTIN 27… |
| Buyer | Hill Road Café, Baner, Pune |
| Lines | Sourdough loaves · HSN 1905 · 40 × ₹120 · ₹4,800.00 |
| Total | ₹4,800.00 — Rupees Four Thousand Eight Hundred Only |
No tax is added. The bakery pays its 1% composition tax on its turnover when it files CMP-08.
Common mistakes
- Titling the document "Tax Invoice" while registered under composition.
- Adding GST to the total — a composition dealer who collects GST has to pay it over in full and faces penalties.
- Forgetting the declaration.
- Selling goods to another state while in the composition scheme, which isn't allowed.
- Leaving out the buyer's GSTIN when the buyer is registered.
How Invoice Native handles it
- In your business details, choose Registered under the composition scheme. Every document is then titled Bill of Supply, prints the composition declaration, and has no tax columns.
- Numbering follows your financial-year series, capped at 16 characters.
- Choose Not registered for GST instead if you have no GSTIN: the document becomes a plain Invoice with no GST.
If you are a regular registered seller, see the GST invoice format for tax invoices. For which code to print on each line, see HSN and SAC codes. Check anything specific to your business with a chartered accountant.
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Frequently asked questions
Can a composition dealer charge GST on a bill of supply?
No. A composition dealer pays tax on its turnover at the composition rate out of its own pocket and must not collect GST from buyers. The bill of supply shows no tax columns and carries the composition declaration.
Can the buyer claim input tax credit on a bill of supply?
No. A bill of supply carries no GST, so there is no tax for the buyer to claim as input tax credit.
What is an invoice-cum-bill of supply?
A single document a regular GST-registered seller can issue to an unregistered buyer when the sale mixes taxable and exempt items. The taxable lines show GST; the exempt lines don't.
Does a bill of supply need an HSN code?
Yes, on the same basis as a tax invoice. With turnover up to ₹5 crore the code is needed on supplies to registered buyers; above ₹5 crore it is needed on every line.
Is a bill of supply the same as a plain invoice from an unregistered seller?
No. A bill of supply is a GST document issued by a registered person — a composition dealer, or a regular seller making exempt supplies. A seller who is not registered for GST issues an ordinary invoice with no GSTIN and no GST.
This page is general information, not tax or legal advice. GST and income-tax rules change and depend on your situation, so check with a chartered accountant or the official GST and income-tax portals.