When You can issue a bill of supply instead of a tax invoice in GST

Section 28 of chapter VII in GST covers the provisions of invoice. Clause 3(b) of section 28 provide for the issuance of bill of supply.Tax invoice is generally issued to charge the tax and pass on the credit. In GST there are some instances where the supplier is not allowed to charge any tax. In those cases he is not eligible to issue a tax invoice. But still some document is required to be issue at the time of supply. GST Model provide for the issuance of BoS for those cases.The specific cases covered by clause 3(b) of section 28 are:

1. a registered taxable person supplying exempted goods and/or services
2. a registered taxable person paying tax under the provisions of section 9

In case of exempted supplies no tax ca be charged by the supplier. Section 9 of GST model law covers the compounding dealers.We can conclude that a person engaged in exempted supplies and a compounding dealer cant issue a taxable invoice. They will issue bill of supply.

Information to be provided in bill of supply:

A bill of supply referred to in the second proviso to section 23 shall be issued by the supplier containing the following details:-
(a) name, address and GSTIN of the supplier;
(b) a consecutive serial number containing only alphabets and/or numerals, unique for a financial year;
(c) date of its issue;
(d) name, address and GSTIN/ Unique ID Number, if registered, of the recipient;
(e) HSN Code of goods or Accounting Code for services;
(f) description of goods or services;
(g) value of goods or services taking into account discount or abatement, if any;
and
(h) signature or digital signature of the supplier or his authorized representative:

Other provisions to apply on bill of supply: 

1) The proviso to sub-rule (1) of rule 1 shall apply, mutatis mutandis, to the BoS issued under this rule:
2) The registered taxable person may not issue a bill of supply if the value of the goods or services supplied is less than one hundred rupees except where the recipient of the goods or services requires such bill:
3)The registered taxable person shall prepare a consolidated bill of supply at the close of each day in respect of all such supplies where the bill of supply has not been issued in terms of the second proviso.

Exemption from issuance of bill of supply:

Section further provide for an exemption from issuance of even bill of supply. It provides that if the value of the goods or services supplied is less than one hundred rupees. The supplier may not issue a Bos. But if the recipient of goods/service require such bill then the taxable person will have to issue bill of supply. In simple words for a supply of less than hundred rupees BoS will be issued only when recipient demand.

Composition levy is basically for small vendors. They are exempted from issuance of bill of supply for less then a hundred rupee supply. Mostly their customers are consumers who are not required any document as they don’t claim any credit.