Pakka Bill vs Kacha Bill: GST Composition Scheme & Bill of Supply Format for Small Retailers

1. The Crucial Distinction: Tax Invoice vs. Bill of Supply

Small Indian retailers frequently confuse Tax Invoices with Bills of Supply. Under the Goods and Services Tax (GST) law, your registration status dictates exactly what kind of bill you are legally permitted to issue:

1. Regular GST Taxpayers: Businesses registered under regular GST must issue a 'Tax Invoice' under Section 31. They charge CGST, SGST, or IGST separately on each bill, collect tax from the retail customer, and pass on Input Tax Credit (ITC).

2. Composition Scheme Dealers (Section 10): Small retailers with annual turnover up to ₹1.5 Crore who have opted for the GST Composition Scheme pay a flat 1% tax on turnover from their own pocket. By law, they CANNOT charge tax to retail customers and CANNOT issue a Tax Invoice. Instead, they must issue a 'Bill of Supply' under Section 31(3)(c).

Issuing a bill with CGST/SGST lines or collecting even ₹1 of tax from a walk-in buyer while under the Composition Scheme is a direct violation of Section 10(4) of the CGST Act and attracts penalties under Section 122.

2. Mandatory Elements of a Legal Bill of Supply (GST Rule 49)

Rule 49 of the CGST Rules specifies the exact details a Bill of Supply must contain to be legally valid:

1. Header: The words 'Bill of Supply' prominently printed at the top.

2. Supplier Identification: Legal trade name, shop address, and 15-digit GSTIN of the dealer.

3. Consecutive Serial Number: A unique numerical or alphanumerical sequence up to 16 characters, unique for each financial year (e.g., KB/2026-27/00142).

4. Date of Issue: Exact calendar date of sale.

5. Recipient Details: For unregistered walk-in retail buyers, customer name and address are optional. If an unregistered customer requests it, you may include their mobile number.

6. HSN Code / SAC: Composition retailers with turnover under ₹5 Crore are exempt from mandatory HSN code listing on B2C retail bills.

7. Description of Goods: Item name, quantity, unit of measurement (kg, pcs, pkt), and gross selling price.

8. Mandatory Statutory Declaration: The bill MUST carry the exact statutory statement: 'Composition taxable person, not eligible to collect tax on supplies.'

3. 'Pakka Bill' vs 'Kacha Bill': Protecting Your Shop Against Disputes

In traditional market parlance, a 'Kacha Bill' refers to a handwritten scrap of paper or unnumbered estimate slip without business details, while a 'Pakka Bill' represents an official recorded sale.

Why switching from handwritten slips to printed thermal Bills of Supply protects your shop:

1. Zero Customer Price Disputes: A clear thermal receipt with itemized line rates, weights, and total amount eliminates customer claims like 'You charged me ₹30 extra yesterday.'

2. Return & Exchange Verification: Having a printed bill number on the receipt makes verifying customer returns effortless, preventing fraudulent returns of old or unpurchased goods.

3. Audit & Bank Loan Eligibility: Banks and NBFCs require recorded turnover history for business loans and credit lines. A continuous digital bill history proves verified retail revenue.

4. Sample 58mm Thermal Bill of Supply Layout

Here is the standard, clean layout generated by Karobari for Composition Scheme retailers:

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        SHREE GANESH TRADERS
    Main Market Road, Pune - 411002
      GSTIN: 27AAAAA0000A1Z5
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        BILL OF SUPPLY
 Bill No: KB/26/0412   Date: 16-Oct-2026
 Time: 19:42           Staff: Ramesh
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 Item          Qty   Rate    Amount
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 Aashirvaad    1 pkt 420.00  420.00
 Fortune Oil   2 ltr 135.00  270.00
 Tata Salt     1 kg   28.00   28.00
--------------------------------
 Total Items: 3        Total: ₹718.00
 Paid via: UPI (Ref: 981244)
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 Composition taxable person, not
 eligible to collect tax on supplies.
   Thank You! Visit Again!
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