The seven documents, and what each is for
In everyday speech all of these are “the bill”. In GST they are different instruments with different consequences, and the difference matters most to the person receiving one.
| Document | Issue it when | Carries tax? |
|---|---|---|
| Tax invoice | You made a taxable supply and you are registered | Yes |
| Bill of supply | Exempt supply, or you are a composition dealer | No |
| Proforma invoice | Before supply — to confirm what will be charged | Shown, not charged |
| Quotation / estimate | Before agreement — an offer, not a demand | Shown as estimate |
| Receipt / payment voucher | On receiving money, as acknowledgement | Reflects tax paid |
| Credit note | You over-charged, or goods came back | Reverses tax |
| Delivery challan | Goods move without a supply happening | No |
Only a tax invoice supports the recipient's input tax credit. A proforma never does, no matter how closely it resembles one — which is why a client's accounts team will ask you to reissue.
What every one of them needs
Whatever the type, these fields are what make the document usable by the person on the other end:
- Both parties named in full, with the address each of them files under.
- A document number from a series you keep consecutive.
- The date of issue, and a due date written as an actual date.
- Line items specific enough to be checked against something that was agreed.
- Tax shown separately from the amount it is charged on.
- Payment instructions on the document itself, not in the covering email.
Which format to pick, in order
- 01Has the work been agreed? If not, issue a quotation.
- 02Has it been agreed but not supplied, and the client needs a document to raise a PO or make an advance payment? Issue a proforma invoice.
- 03Has the supply happened and are you charging GST? Issue a tax invoice.
- 04Has the supply happened but the supply is exempt, or you are a composition dealer? Issue a bill of supply.
- 05Did you invoice too much, or did goods come back? Issue a credit note against the original invoice number.
- 06Are you acknowledging money received against an invoice already raised? Issue a receipt.
The rupee formatting nobody gets right
Indian invoices group digits in the Indian system — 12,34,567.50, not 1,234,567.50. It is not decorative: a finance team reading a Western-grouped figure at speed reads the wrong number, and on a large invoice they read it wrong by a factor of ten.
The same goes for the amount in words, which is why it is on almost every Indian invoice. “Twelve Lakh Thirty Four Thousand” cannot be misread the way a row of digits can. The generator writes it in lakh and crore for INR and in millions for other currencies, from the same number it printed above.