Bill of Supply explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Not every GST document is a tax invoice. Section 31 also asks for a bill of supply when no tax is charged, a receipt voucher when money arrives before the supply, a refund voucher when that advance has to go back, and a payment voucher when you owe tax on reverse charge. Using the wrong one is a common cause of return errors and of credit problems for buyers.
Issue a bill of supply (section 31(3)(c), Rule 49) if you are a composition taxpayer or your supply is wholly exempt. On receiving an advance, issue a receipt voucher (section 31(3)(d), Rule 50), not an invoice. If the supply never happens, issue a refund voucher (section 31(3)(e), Rule 51) referring to the receipt voucher. Tax on advances is payable for services but not for goods.
Quick chooser
| Situation | Document | Rule |
|---|---|---|
| Taxable supply by a regular taxpayer | Tax invoice | Rule 46 |
| Composition taxpayer, or wholly exempt supply | Bill of supply | Rule 49 |
| Taxable and exempt items to an unregistered buyer | Invoice-cum-bill of supply (optional) | Rule 46A |
| Advance received | Receipt voucher | Rule 50 |
| Advance received, supply not made | Refund voucher | Rule 51 |
| Reverse-charge purchase | Payment voucher, plus self-invoice if the supplier is unregistered | Rule 52, section 31(3)(f), (g) |
Bill of supply
A bill of supply is used where no tax can be charged. Under section 31(3)(c) it applies to a registered person who supplies exempted goods or services or pays tax under the composition scheme in section 10. The Background Material notes this includes a service provider using the composition scheme. Rule 49 requires the supplier's name, address and GSTIN, a serial number of up to 16 characters unique for the financial year, date, recipient details if registered, HSN, description, value after discount and a signature (not required on an electronic bill of supply).
Three points matter in practice:
- A bill of supply can be skipped where the value is under Rs. 200, subject to conditions.
- The buyer cannot take input tax credit on a bill of supply.
- A tax invoice or similar document issued under another law for a non-taxable supply is treated as a bill of supply.
Where you sell taxable and exempt items together to an unregistered buyer, Rule 46A lets you issue one invoice-cum-bill of supply. It does not apply if the buyer is registered.
If you are unsure whether a product or service line is exempt, a GST health check of your invoices will show which documents should have been issued.
Receipt voucher for advances
Section 31(3)(d) requires a receipt voucher, or another document with the prescribed particulars, on every advance payment for goods or services. It is not a tax invoice. Rule 50 requires supplier and recipient details, a serial number, date, description, amount of advance, rate and amount of tax, place of supply, reverse-charge status and signature.
Two fallbacks apply when the facts are unclear at the time of the advance:
- if the rate of tax cannot be determined, tax is paid at 18%;
- if the nature of supply cannot be determined, it is treated as inter-State.
The Background Material points out that tax on advances is payable for services but not for goods, under Notification 40/2017-CT as superseded by 66/2017-CT. A receipt voucher is still to be issued even where the supply takes place in the same month. Vouchers for advances apply to money, not to non-monetary consideration. The receipt voucher is reported in Table 13 of FORM GSTR-1. When the supply is made you issue a full tax invoice as usual, as covered in tax invoice contents and time limit.
Refund voucher when the supply does not happen
If a receipt voucher was issued and no supply follows, section 31(3)(e) lets the supplier issue a refund voucher. Rule 51 requires the number and date of the receipt voucher, description, amount refunded, rate and tax paid. The receipt voucher is reversed by the refund voucher and is not cancelled.
Illustration: a customer pays Rs. 1,18,000 for an event, being Rs. 1,00,000 plus 18% GST of Rs. 18,000. The event is cancelled and the full amount goes back. You issue a refund voucher for Rs. 1,18,000 referring to the receipt voucher, showing Rs. 18,000 tax.
Circular 137/07/2020-GST gives the treatment for cancelled contracts:
| Case | Document | Tax recovery |
|---|---|---|
| Advance taken, invoice already issued before the supply, then cancelled | Credit note under section 34 | Adjust in the return subject to section 34 conditions; no separate refund claim |
| Advance taken, only a receipt voucher issued, then cancelled | Refund voucher | Refund of tax through RFD-01 as "excess payment of tax", where no output liability is available |
For claims, see the refund service. The source's own notes add that the law does not close the loop where the rate or nature of supply becomes known later. The practical route is to issue a refund voucher to reverse the original receipt voucher and then issue either a tax invoice or a fresh receipt voucher.
Reverse-charge documents
A recipient paying tax under section 9(3) or 9(4) issues a payment voucher at the time of payment to the supplier (Rule 52). If the supplier is unregistered, the recipient also issues a self-invoice within 30 days of receipt of the supply (Rule 47A). The series of self-invoices issued in a tax period is reported in Table 13 of GSTR-1 for that period. For the timing of tax on these purchases see time of supply under reverse charge.
Need help choosing the right document?
If you mix taxable, exempt and advance-based billing, the wrong voucher type will show up as mismatches later. Our team can review your billing templates and voucher practice through a GST health check, and set up the document flow so that each transaction is reported correctly in GSTR-1.
Key takeaways
- Bill of supply: composition taxpayers and wholly exempt supplies. No tax is charged and buyers get no credit.
- Advance: receipt voucher, not a tax invoice. Tax applies to advances for services, not goods.
- If the rate is unknown at the time of advance, use 18%. If the nature of supply is unknown, treat it as inter-State.
- Cancelled supply: refund voucher against the receipt voucher.
- Reverse charge: payment voucher, and a self-invoice for unregistered suppliers.
Read next
- Tax invoice contents and time limit: Rules 46 and 47
- Credit note under section 34
- Receipt, payment and refund vouchers: section 31(3)
- Rule 46A: the invoice-cum-bill of supply
Disclaimer: Positions stated as on 30 September 2026, based on the CGST and IGST Acts and Rules as amended, the Finance Act 2026, and the ICAI Background Material on GST (14th Edition, July 2026). Verify current notifications before acting.