GST
Bill of supply instead of tax invoice
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Facts
Composition dealers and sellers of exempt goods issue a bill of supply, not a tax invoice. They cannot charge GST separately on the bill.
Provisions and law
- Rule 49, CGST Rules 2017Bill of supply for exempt supplies and composition dealers
- Sec 10, CGST Act 2017Composition taxpayers cannot collect tax from buyers
Analysis
Rule 49 sets the contents of a bill of supply, and composition dealers must also mention that they are a composition taxable person not eligible to collect tax. Example: a composition grocery shop selling ₹2,000 of goods writes ₹2,000 on the bill with no GST line. Showing GST on the bill would be collecting tax you are not allowed to collect.
Conclusion
- Use a bill book or billing app set to bill of supply.
- Print the composition declaration on the bill.
- Do not show any GST line.
- Record bills in your daily register.
Charging GST on the bill as a composition dealer is a common and costly mistake.
A Savvy can do this for you
Daily sales and purchase records for GST, cash and UPI
₹1,499
Get this doneAsk a Savvy on WhatsAppGeneral guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.