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Bill of Supply or Tax invoice?

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P MURUGAN

ACCOUNTANT

164 Points Posted on 06 December 2024

An Assesee who sell taxable goods and issue tax invoice. Now he sell one car for which no ITC taken and that fixed asset (car) depreciated value is less than the sale vale. i. e No Margin.So he (assessee)will not collect GST from car buyer. In that situation, an assessee raise invoice or bill of supply? Is e-invoice mandatory for this tranasaction?

Replies (2)

Quick Summary

This discussion clarifies whether to issue a Bill of Supply or a Tax Invoice when selling a used car, particularly when no Input Tax Credit (ITC) was claimed and the sale value exceeds the depreciated value. While initially suggested that a Bill of Supply might be appropriate if no GST is collected, further advice clarifies that a Tax Invoice is generally required, even if GST is only charged on the margin. If the margin is negative, a Tax Invoice with nil tax is still issued, referencing relevant notifications. E-invoicing is not mandatory for transactions where GST is not levied.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 07 December 2024

For the sale of the car, the assessee should issue a Bill of Supply instead of a tax invoice. This is because the transaction is not subject to GST, given that no GST is being collected from the buyer. However, e-invoice is not applicable for transactions where GST is not levied, such as this scenario.

Aashok Kumar Sharma

Finance/Compliance Consultant

75661 Points Posted on 07 November 2026

Issue a tax invoice:

• Selling a used car (a business asset on which no ITC was taken) under the margin scheme (Notf 08/2018-CT(R)) is a taxable supply. GST is charged on the margin. A bill of supply is for exempt supplies or composition dealers, so it isn't appropriate here.

• Issue a tax invoice showing the sale value, the taxable margin (sale price minus WDV as per the IT Act), and GST on the margin, with a reference to Notf 08/2018. If the margin is negative, no GST is payable, but a tax invoice with nil tax (or a note) is still issued.

• TCS under 206C(1F) if the sale value exceeds Rs 10 lakh.