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Difference between a bill and an invoice
Shops say bill. Offices say invoice. Most days the two words mean the same paper. Under GST the name on the paper can change what you owe. Here is how to tell them apart.
What is the difference between a bill and an invoice?
In everyday trade, a bill and an invoice are the same thing: a document asking a buyer to pay for goods or services. Under GST, the law names specific documents. A registered seller issues either a tax invoice or a bill of supply, depending on the supply.
So the word on the paper matters more than the habit of the shop.
"Bill" is the casual word. "Tax invoice" and "bill of supply" are the legal ones.
What is a tax invoice under GST?
A tax invoice is the document a registered person issues for taxable goods or services. Section 31 of the CGST Act says it must show the description, the value, the tax charged and other prescribed particulars. The buyer uses it as proof of the tax charged.
For goods, it is issued at or before removal or delivery. For services, within a prescribed period.
We do not state that period here. Your CA can confirm the current one.
What is a bill of supply?
A bill of supply is issued instead of a tax invoice. Section 31(3)(c) requires it from a registered person who supplies exempted goods or services, or who pays tax under the composition scheme in Section 10. It carries no tax charged to the buyer.
A seller under the composition scheme cannot collect GST from the buyer. So the paper has no tax rows.
Exempted goods work the same way. No tax is charged, so there is no tax invoice.
Which document should I issue?
It depends on what you sell and how you are registered. Taxable supplies get a tax invoice. Exempted supplies, or sales under the composition scheme, get a bill of supply. An unregistered seller issues neither under Section 31. Ask your CA when unsure.
Here is a simple way to choose. These are illustrations, not real customers.
Which paper for which sale
- A registered shop sells taxable goods: tax invoice.
- A registered shop sells only exempted goods: bill of supply.
- A registered shop under the composition scheme: bill of supply.
- A seller who is not registered: ask your CA what to hand over.
Can a plain bill replace a tax invoice?
No, where the law requires a tax invoice. A hand-written slip headed "bill" does not meet Section 31 unless it carries the required particulars. A registered buyer may need a proper tax invoice to support the tax paid, so give one.
A clean tax invoice also saves time with your buyer's accountant.
Section 31 lets the Government, by notification, say that another document is deemed a tax invoice for some services. Check before you rely on that.
Is a receipt the same as a bill?
No. A bill or invoice asks for payment. A receipt confirms that payment arrived. Section 31 also names a receipt voucher, which a registered person issues when taking an advance payment before the supply is made.
The advance receipt is a legal document too, not just a courtesy slip.
Does Invoice Saathi print both?
Yes. The app prints a tax invoice with CGST and SGST or IGST rows, and a bill of supply with no tax rows. One setting in Setup decides which one prints. The app does not tell you which one your business needs. Your CA does.
The bill of supply is on the Free plan.
The app also does not decide your registration type for you.
Sources
Checked on 23 October 2026. Rules change, so confirm anything that affects your filing with your CA.
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