# Bill of supply vs tax invoice

> Understand when to issue a GST bill of supply instead of a tax invoice: composition dealers, exempt and nil-rated supplies, and what each document must contain.

Not every GST-registered business charges tax. If you cannot or need not collect GST on a supply, you issue a bill of supply instead of a tax invoice. Here is how they differ.

## The core difference

- A tax invoice shows GST charged, so your customer can claim input tax credit where eligible.
- A bill of supply shows no GST because none is being charged on that supply.

## When a bill of supply is used

- You are a composition taxable person, who cannot collect tax from customers
- You supply goods or services that are exempt from GST or nil-rated
- Other cases covered by the invoice rules; confirm yours with a tax professional

## What it should contain

A bill of supply is simpler than a tax invoice. It generally carries your name, address and GSTIN, a unique number and date, the customer's details where needed, a description and value of the goods or services, and a signature.

- Composition dealers must also state that they are a composition taxable person, not eligible to collect tax on supplies

## Create one

Our free GST invoice generator has a bill of supply mode that removes the tax columns and adds the composition wording. GST rates and rules change, so always check the current rate for your goods or services on the official GST portal or with your tax professional.

## FAQ

### Can a composition dealer issue a tax invoice?

No. Composition taxable persons issue a bill of supply and cannot collect GST from customers.

### Can my customer claim input tax credit on a bill of supply?

Generally no, because no tax is charged on it.

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Source: https://finex.thunderdevelops.in/guides/bill-of-supply-vs-tax-invoice
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