Tax invoice, bill of supply, proforma or challan?

Five documents that look alike and mean completely different things.

Last checked 20 September 2026

Issue a tax invoice for a taxable supply; a bill of supply when no tax is charged, because the goods are exempt or you are under composition; a delivery challan when goods move without a sale; and a proforma invoice or quotation when nothing has been supplied at all — those two are not tax documents.

The five documents at a glance

Document	Issue it when	Shows GST?	Creates a debt?
Tax invoice	You made a taxable supply	Yes	Yes
Bill of supply	The supply is exempt, or you are a composition dealer	No	Yes
Proforma invoice	The buyer needs the figures before committing	Shown for information	No
Quotation	You are offering a price	Usually indicative	No
Delivery challan	Goods move but no supply has happened yet	No tax charged	No

Tax invoice

The default for a registered business making a taxable supply. It carries the tax, and it is what lets your buyer claim credit. Its required contents are in GST invoice format.

Bill of supply

Used where there is simply no tax to show — the goods or services are exempt or nil-rated, or you are registered under the composition scheme. It looks like an invoice with the tax columns removed. A composition dealer must also state on it that they cannot collect tax on supplies.

Bill of Supply — free, no signupFor composition dealers and exempt supplies. No GST columns.

Note

Where a supply includes both taxable and exempt items, a single invoice-cum-bill-of-supply may be issued covering both.

Proforma invoice

A preview of the bill. Buyers ask for one to release an advance, open a letter of credit or get internal approval. It is not a tax document: it does not create a liability, it does not pass credit, and it does not go in your invoice series. When the supply happens, you issue a real tax invoice.

Proforma Invoice — free, no signupThe final bill before the sale, for advances and approvals.

Quotation

An offer, usually with a validity date. Less formal than a proforma and generally used earlier in the conversation. No tax consequence at all.

Quotation Maker — free, no signupPrice quotes and estimates with GST, validity date and your terms.

Delivery challan

For goods that move without a sale — stock transferred between your own branches, material sent for job work, goods sent on approval, or a supply whose quantity is not known at dispatch. The challan travels with the goods; an invoice follows later if and when the supply is made.

Delivery Challan — free, no signupMove goods for job work, approval or stock transfer (Rule 55).

Careful

Moving goods on a challan does not remove the need for an e-way bill where the value thresholds are met.

Choosing, in practice

1
Has a supply actually happened?
No — quotation, proforma or challan. Yes — carry on.
2
Is tax chargeable on it?
No, because it is exempt or you are under composition — bill of supply. Yes — tax invoice.
3
Are goods moving?
Then check the e-way bill threshold as well, whichever document you issued.

Can a proforma be converted into a tax invoice?

Not as such. You issue a fresh tax invoice, with its own number from your invoice series, when the supply takes place.

Can I claim credit on a proforma invoice?

No. Credit requires a tax invoice or debit note. A buyer who asks you to "just send a proforma" so they can claim is asking for something that does not work.

What about a receipt voucher?

Where you receive an advance against a future supply, the rules require a receipt voucher. If the supply then does not happen, a refund voucher.

Sources

CGST Act 2017, section 31; CGST Rules, Rules 46, 49 and 55
CBIC — GST Acts, Rules and notifications (cbic-gst.gov.in)

Free tools for this

Free Proforma Invoice

The final bill before the sale, for advances and approvals.

Free Delivery Challan

Move goods for job work, approval or stock transfer (Rule 55).

Free Bill of Supply

For composition dealers and exempt supplies. No GST columns.