A taxable person whose aggregate turnover during the financial year is less than Rs.100 lakhs can opt for GST composition scheme and can pay tax on the basis of the turnover at the predetermined fixed rate.

Taxable person opted for GST composition scheme is required to issue a bill of supply for the supplies made by him instead of a tax invoice. The rationale behind issuing a bill of supply is that a person (being a supplier of exempted goods or composition taxable person) not eligible to collect tax from its customer is debarred from issuing a taxable invoice. Furthermore, a taxable person who is required to issue a bill of supply is not entitled to any credit of input tax as he cannot collect any tax from the recipient on supplies made by him.

For an example, MR. X supplied certain goods for Rs. 20,000 to his customer. Mr. X will be required to raise a bill of supply for Rs. 20,000 without charging any tax. Mr. X is required to calculate tax on the bill and pay such tax to the government from his own pocket.

Composition Scheme Dealer Invoice and bill Format

Bill of Supply is required to be Issued in the following cases:

a) A Bill of Supply is required to be issued where a registered person is supplying goods which are exempted.

b) Where registered person avail the benefit of GST composition scheme

In both cases, the registered person cannot charge tax from the customer i.e. cannot issue a tax invoice, so he has to raise a Bill of Supply.

Primarily, there are 3 different types of Invoices under GST law such as:

  • TAX INVOICE – Where a supplier makes a taxable supply of goods or services either within the state or outside the state and the supplier is required to collect from the customer and pay such tax to the government.
  • BILL OF SUPPLY – Where a supplier makes the supply of goods or service on which he is not required to collect tax from the customer. Bill of supply is issued where a person is engaged in the supply of goods which are exempted from GST or supplies made by a person opted for composition scheme.
  • PAYMENT VOUCHER – Where tax is payable on supplies under the reverse charge then the payment voucher is required to be raised.

The manner in which invoices are issued under GST is as follows:-

TAX INVOICE (for Supply of Goods) is to be issued in triplicate as :

  • The original copy of the invoice is for the recipient of the goods.
  • The duplicate copy of the invoice is for the transporter
  • The triplicate copy of the invoice is for the supplier of the goods.

TAX INVOICE (for Supply of Services) is to be issued in 2 copies as :

  • The original copy of the invoice is for the recipient of the services.
  • The duplicate copy of the invoice is for the transporter

BILL OF SUPPLY (for both goods and services) can be issued as:

  • The original copy of the bill is for the recipient of the goods.
  • The duplicate copy of the bill is for the supplier of the goods.

The contents of a Bill of supply are as follows:

(a) name, address and GSTIN of the supplier of the goods;

(b) date of issue;

(c) name, address and GSTIN or UIN (if registered) of the recipient of the goods;

(d) HSN Code of the goods supplied;

(e) Details of the description of the goods supplied;

(f) The value of goods supplied by taking into account any discount or abatement allowed

(g) a sixteen character consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters

(h) signature of the supplier of the goods or his authorised representative.

Click here to read about GST Composition Scheme for Restaurants here

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