Bill of Supply: GST Format Below Rs. 20L

A common pain for freelancers, small service providers, and shopkeepers below the GST threshold: a corporate client or a B2B buyer says 'send me a GST invoice for this Rs. 50,000 service'. You don't have a GSTIN. You can't legally issue a tax invoice with a GSTIN you don't possess.

The right answer is a 'bill of supply' under Section 31(3)(c) of the CGST Act 2017, with format prescribed in Rule 49 of the CGST Rules. It's the legitimate document for an unregistered seller to issue. Most clients accept it once you explain you're below the threshold and not charging GST.

Three scenarios trigger a bill of supply instead of a tax invoice:

1. You're below the GST registration threshold (Rs. 20 lakh aggregate annual turnover, or Rs. 10 lakh in special-category states) and have not voluntarily registered.

2. You're registered but supplying exempt goods or services (e.g. educational services, healthcare).

3. You're a registered composition-scheme dealer (turnover up to Rs. 1.5 crore, paying tax at a fixed rate without ITC). Composition dealers issue bills of supply, not tax invoices.

A registered regular taxpayer making a taxable supply must issue a tax invoice, never a bill of supply. The two document types are not interchangeable. They trigger different filing obligations and different audit treatments.

Under Rule 49, a bill of supply must include:

• Name, address, and (if available) other details of the supplier. GSTIN is omitted because it doesn't exist for unregistered suppliers. If you have a GSTIN as composition or exempt supplier, include it.

• A unique serial number, in one or multiple series, not exceeding 16 characters, including alphabets, numbers, and special characters

• Date of issue

• Name, address, and (if available) GSTIN of the recipient (B2B buyers will have one)

• HSN/SAC code of the goods or services

• Description of the goods or services

• Value of the supply (no tax breakdown. Bills of supply do not show CGST/SGST/IGST)

• Signature or digital signature of the supplier or authorised representative

Rule 49 also notes that the document must be titled 'BILL OF SUPPLY' (not 'invoice', not 'tax invoice') so the recipient and any audit trail can immediately identify the document type.

Side-by-side, the two documents have substantially overlapping fields but key differences:

• Tax invoice: shows GSTIN of supplier, CGST/SGST or IGST line items, tax rate per item, total tax payable, total invoice value (including tax). Title: 'TAX INVOICE'.

• Bill of supply: omits supplier GSTIN (or shows the composition GSTIN), no CGST/SGST/IGST lines, no tax-rate column, total value only (excluding GST since none is charged). Title: 'BILL OF SUPPLY'.

For a recipient business, both documents serve as proof of expense and accounting records, but only a tax invoice generates input tax credit. A B2B buyer asking specifically for ITC must source from a registered supplier. A bill of supply will not satisfy that need.

Generate a compliant bill of supply or tax invoice (pakka bill). The form auto-detects whether you've entered a GSTIN and adjusts the document title accordingly. Free watermarked preview, Rs. 9 for the clean PDF.

Voluntary GST registration below the threshold makes sense in three situations:

1. Your B2B clients require ITC. Corporate clients, especially mid-market and enterprise, often won't engage suppliers who can't issue tax invoices. The cost of voluntary registration (filing GSTR-1, GSTR-3B, GSTR-9 monthly/annually) may be worth it to access these clients.

2. Your input costs include significant GST that you could otherwise recover via ITC. If you spend Rs. 5 lakh annually on inputs at 18% GST (Rs. 75,000 of input tax), voluntary registration lets you offset that against tax on your outputs.

3. You're approaching the Rs. 20 lakh threshold organically and want to avoid the disruption of mid-year transition.

On the other hand, voluntary registration adds compliance burden: monthly returns, accountant fees, GSTR-3B late fees if missed. For a freelancer billing Rs. 5–8 lakh annually with mostly individual or small-business clients, staying unregistered and issuing bills of supply usually wins on net. Run the math against your actual client mix and input costs.

When a client pushes back asking 'why isn't this a tax invoice?', a short explanation usually resolves it:

• 'I'm below the Rs. 20 lakh GST registration threshold under CGST law, so I'm not GST-registered and don't have a GSTIN. Section 31(3)(c) of the CGST Act 2017 requires unregistered suppliers like me to issue a bill of supply instead of a tax invoice. The bill of supply has all the documentation you need for your accounting records. It doesn't show GST line items because no GST is being charged on this transaction.'

• 'You won't be able to claim ITC against this transaction because no GST is collected. The bill of supply is still your valid proof of expense for income tax and accounting purposes.'

Most clients accept this readily. Pushback usually comes from accounting teams unfamiliar with bills of supply or from large corporates whose AP processes are wired specifically for tax invoices. In those cases, voluntary registration may be the only practical path. The alternative is negotiating a higher rate to offset the lost ITC the client can't claim.

Generating a Rule-49-compliant bill of supply with all mandatory fields takes ~60 seconds in our pakka bill generator. Leave the GSTIN field blank and the document title renders as 'BILL OF SUPPLY' rather than 'TAX INVOICE'. Free watermarked preview, Rs. 9 for the clean PDF.

For recurring clients, save your business profile in the form so each invoice or bill takes 30 seconds. Pair with a payment receipt once funds clear: a separate document confirming receipt, with UTR number for digital transfers and revenue stamp placeholder for cash above Rs. 5,000. The two-document workflow (bill of supply + payment receipt) is the cleanest paper trail for unregistered service providers handling B2B clients.