If you run a small shop or firm in India, you have probably heard three terms thrown around: Tax Invoice, Bill of Supply, and just a plain "bill." They sound similar, but each one follows a different rule under GST law, and printing the wrong one can create real problems at filing time. Here is the difference, explained the way a vyapari would actually want it explained.
Tax Invoice: for GST Regular dealers
If you are registered under GST as a Regular dealer, the law requires you to issue a Tax Invoice on every taxable sale. A Tax Invoice shows the taxable value of the sale separately from the tax charged on it, split as CGST plus SGST for a sale within your own state, or IGST for a sale to another state. It also carries your GSTIN, the buyer's GSTIN and state if it is a business-to-business sale, and an HSN code for each item. This is the document your customer needs if they want to claim input tax credit, and it is what feeds your monthly GSTR-1 return.
The good news is that once your business profile and product HSN codes are set up correctly, this calculation should never be something you do by hand. A billing app worth using compares your firm's registered state against the customer's place of supply and applies CGST/SGST or IGST automatically, every single time.
Bill of Supply: for Composition dealers
If you have opted into the GST Composition Scheme instead of Regular, the rule flips: you are not allowed to charge or show tax on your invoice at all. Instead, you issue a Bill of Supply, which looks similar to a Tax Invoice but carries no CGST/SGST/IGST columns, and must instead carry a specific declaration stating that you are a composition taxable person not eligible to collect tax on supplies. Leaving this declaration off, or accidentally printing a Tax Invoice format instead, is a common and avoidable compliance mistake for Composition dealers.
Simple Bill: for businesses with no GST number at all
Plenty of small shops, especially ones just starting out or under the GST registration threshold, do not have a GST number yet. For them, neither a Tax Invoice nor a Bill of Supply is correct or required. A plain Simple Bill (sometimes just called a parcha) with no tax fields at all is the right document: item, quantity, rate, total, done. There is no legal requirement to show any tax breakdown if you are not registered for GST in the first place.
This is exactly why a genuinely useful billing app should treat non-GST billing as a first-class mode, not an afterthought bolted onto a GST-first product. A shopkeeper without a GST number should never have to look at tax fields they do not need.
What happens if your business grows or changes?
Businesses evolve. You might start with a Simple Bill, register for GST once you cross the threshold, or move from Composition to Regular as your turnover grows. Whatever app you use, the one thing worth checking before you commit to it is whether switching between these modes is actually easy, and whether your past bills and customer history survive the switch. A one-tap upgrade from Simple Mode to GST Mode, with every past bill and customer record intact, should be table stakes, not a premium feature.
What happens if you print the wrong one
The consequences are not dramatic on the day. They show up later, which is what makes this worth getting right the first time.
If you are a regular dealer and you hand a B2B buyer something that is not a proper tax invoice, your buyer has a problem: without the required fields they may be unable to claim input tax credit on that purchase. You will hear about it, usually from their accountant, usually weeks later, and usually with a request to reissue.
If you are a composition dealer and you issue a document that shows a tax split, you are stating something about your own registration that is not true. Composition dealers cannot collect tax from customers, which is exactly why the declaration on a bill of supply exists.
And if you are not registered at all, printing something that looks like a tax invoice, with a tax column or a GSTIN-shaped number, is worse than a plain bill, because it implies a registration you do not have.
The common thread is that all three failures come from the document type being a manual choice made at the counter. It should be decided once, from your registration status, and then applied every time without anyone having to remember.
Which one does Vanij print, and when?
Vanij looks at your Business Profile setup (GST Regular, Composition, or no GST number at all) and automatically prints the legally correct document every time, whether that is a Tax Invoice with CGST/SGST/IGST, a Bill of Supply with the mandatory declaration, or a clean Simple Bill with no tax fields. You never choose the wrong template by accident, and switching from Simple Mode to GST Mode later keeps every customer, product, and past bill exactly as it was. See our GST and Compliance FAQ for more, or check the full feature list.