Difference between bill of supply & tax of invoice?

In the realm of billing software, understanding the disparity between a Bill of Supply and a Tax Invoice is crucial. On the contrary, a Tax Invoice is a comprehensive document that includes the applicable tax on the transaction. Knowing the distinction ensures accurate financial records, compliance, and seamless transactions in the digital billing landscape.

  • Bill of supply is used for exempted item
  • Tax of invoice is used for taxable items



GST Applicability

Tax Calculation

Input Tax Credit (ITC)

Use Case



GST Number

Bill of Supply

A document used for GST-exempt supplies or supplies by a composition dealer.

Applicable for GST-exempt supplies or composition dealers.

No tax is calculated or mentioned in a Bill of Supply.

Recipient cannot claim ITC on purchases made using a Bill of Supply.

Used for supplies like fruits, vegetables, and other GST-exempt items.

Contains details of the supplier, recipient, and description of goods/services.

Generally used by small businesses or businesses dealing with exempt goods.

Not mandatory for the supplier in the case of a Bill of Supply.

Tax Invoice

A document used for taxable supplies under GST.

Applicable for taxable supplies under GST.

Tax amount is calculated and mentioned separately for each taxable item.

Recipient can claim ITC on purchases made using a Tax Invoice..

Used for supplies of goods and services where GST is applicable.

Contains detailed information about the supplier, recipient, GSTIN, and HSN code of goods/services.

Mandatory for registered businesses making taxable supplies..

Mandatory for the supplier in the case of a Tax Invoice.