Learn How to Raise Invoice in Composition Dealer Under GST. The GST Composition Scheme is designed for small taxpayers who want simple compliance and lower tax rates. Unlike regular dealers, composition dealers cannot issue tax invoices. Instead, they must issue a Bill of Supply. Many small businesses get confused about this rule, and improper invoicing often leads to penalties.
In this guide, we explain step-by-step how to raise invoices as a composition dealer under GST, with format requirements, examples, and compliance tips.
✅ Key Rules for Composition Dealer Invoice
A composition dealer must follow specific rules while raising invoices:
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Cannot issue a tax invoice.
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Must issue a Bill of Supply (since they cannot collect tax separately).
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Must mention the words “Composition taxable person, not eligible to collect tax on supplies” on every bill.
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Should not show tax amount separately on the bill.
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Should include all standard details prescribed by GST law.
📌 Mandatory Details in a Bill of Supply
Every Bill of Supply under the GST Composition Scheme must contain:
| Required Field | Details to Include |
|---|---|
| Business Name, Address, GSTIN | As per GST registration certificate |
| Bill of Supply Number | Serial number (unique, consecutive) |
| Date of Issue | Invoice date |
| Buyer’s Name & Address | Mandatory for B2B sales |
| HSN Code & Description of Goods | HSN up to 2 digits (for turnover <₹5 cr) |
| Value of Goods/Services | Total bill amount |
| Signature/Digital Signature | Authorized signatory |
| Declaration | “Composition taxable person, not eligible to collect tax on supplies” |
🧾 Example of Bill of Supply for Composition Dealer
| Bill of Supply | Details |
|---|---|
| Supplier Name | ABC Traders |
| GSTIN | 07ABCDE1234F1Z5 |
| Bill No. | BOS/2025/001 |
| Date | 23-Aug-2025 |
| Buyer Name | XYZ Enterprises |
| Description | Food Grains |
| HSN Code | 1001 |
| Quantity | 100 Kg |
| Value | ₹50,000 |
| Declaration | Composition taxable person, not eligible to collect tax on supplies |
⚠️ Common Mistakes by Composition Dealers
Many small businesses make errors while raising invoices:
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Issuing a tax invoice instead of a Bill of Supply.
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Mentioning GST tax rate separately (not allowed).
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Missing the mandatory declaration.
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Using improper serial numbering.
👉 Such mistakes may lead to penalties or cancellation of composition registration.
✅ Best Practices for Compliance
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Use a GST-compliant billing software that supports Bill of Supply.
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Maintain proper invoice series (e.g., BOS/2025/001, BOS/2025/002).
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Train staff on difference between tax invoice vs Bill of Supply.
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Keep copies of all bills for minimum 6 years.
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Consult with a GST expert for regular compliance.
Conclusion
Knowing about How to Raise Invoice in Composition Dealer Under GST is very important hope you get the clarity about this. For a composition dealer, raising invoices under GST means issuing a Bill of Supply instead of a tax invoice. Following the mandatory format and declaration ensures compliance and avoids penalties.
👉 Need help with invoice formats and GST compliance? Contact us for expert assistance.