The quick answer
A tax invoice, bill of supply and ordinary bill can all describe a sale, but they do different legal jobs. A tax invoice normally records a regular taxpayer’s taxable supply. A bill of supply applies to the prescribed exempt or composition situations. An unregistered shop uses an ordinary bill without collecting an amount as GST.
Decide from the supplier’s valid status and the supply’s treatment. Do not choose merely from the buyer’s preference or a template’s appearance. Mixed supplies and special cases may require additional document checks.
Before you begin
- Supplier registration status and taxpayer type.
- Taxability and classification of the actual goods or services.
- Recipient details and the purpose of the sales record.
See how the pieces connect
Status
Check whether the supplier is registered and under which scheme.
Supply
Establish taxable, exempt or other applicable treatment.
Document
Choose the prescribed invoice or bill.
Record
Retain the sale and payment with the correct particulars.
Work through the steps
Check the supplier’s current status
Confirm GSTIN, effective date and scheme from the actual business records. Do not assume a pending application or an old certificate establishes current regular-taxpayer status.
Identify the supply’s treatment
Determine whether the items are taxable, exempt or subject to another treatment. A shop may sell more than one kind of item, so one default document setting may not cover every transaction.
Use a tax invoice when appropriate
For a regular taxpayer’s taxable supply, include the required invoice particulars and correct GST components. Registered customer details matter for their records and potential eligible credit.
Use a bill of supply for prescribed cases
A composition taxpayer or a registered supplier making the relevant exempt supply uses the applicable bill-of-supply treatment. Include required particulars and declarations and do not separately collect GST under composition.
Use ordinary billing when unregistered
Record seller, date, bill number, items, price and payment clearly. An unregistered seller cannot label part of the customer’s payment as GST collection just because purchase costs included GST.
Check consistency before issue
Compare the document title, registration particulars and line treatment. Keep sales evidence and payments linked. For a mixed transaction or an unusual supply, get the appropriate document requirements checked.
A worked example
Choose from status and supply
General cases for understanding the difference; verify special situations separately.
| Seller and supply | Typical document | Separate GST collection |
|---|---|---|
| Regular registered seller, taxable supply | Tax invoice | As applicable |
| Composition taxpayer | Bill of supply | No |
| Registered seller, prescribed exempt supply | Bill of supply | No tax on exempt supply |
| Unregistered shop | Ordinary bill | No collection as GST |
The label and the calculation must agree. Renaming an ordinary bill “tax invoice” cannot create registration or customer credit eligibility.
Common mistakes to avoid
- Printing a GST collection on an unregistered shop’s bill.
- Using a composition bill with separately added GST.
- Assuming a buyer’s GSTIN makes every supplier’s bill a tax invoice.
Questions you might have
Does a bill of supply support the same input credit as a tax invoice?
No. The buyer must consider the supply and statutory credit conditions; the two documents do not provide the same treatment.
Can a shop use different documents for different supplies?
Where the law requires different treatment, the records must reflect it. Check mixed-supply and combined-document requirements for the actual transaction.
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Sources and further reading
Official rules and portal screens can change. Use the linked authority for the current requirements; the figures in our worked examples are illustrative.