Invoice vs Bill: What's the Difference?
People use "invoice" and "bill" interchangeably, but under GST the words point to different documents. Here is a plain guide for Indian freelancers and small businesses.
The short answer
An invoice is what a seller sends to request payment, usually with credit terms. A bill is the buyer-side word for the same request, and is typically paid on the spot. Under GST, if you charge tax you issue a tax invoice; if you charge no GST you issue a bill of supply.
Side-by-side comparison
| Invoice | Bill | |
|---|---|---|
| Issued by | Seller / service provider | Often the same doc, as seen by the buyer |
| Common in | B2B, freelancers, agencies | Retail, restaurants, utilities |
| Payment timing | Usually later (net 7/15/30) | Usually immediate |
| Detail level | Line items, HSN/SAC, GSTIN, terms | Often short summary |
| GST name | Tax invoice (GST charged) | Bill of supply (no GST charged) |
Tax invoice vs bill of supply
A registered business charging GST must issue a tax invoice with the fields in Rule 46 — GSTIN, HSN/SAC, and the CGST + SGST or IGST split. Composition dealers and sellers of exempt supplies issue a bill of supply instead, which shows no tax. See our GST invoice format guide for the full field list.
Which one should a freelancer send?
Send an invoice. Clients need it for their accounts, and if you are GST-registered your client needs a proper tax invoice to claim input tax credit. Not registered? Send a simple invoice without GST.
FAQs
Is an invoice and a bill the same thing?
In everyday use they describe the same transaction from two sides. The seller sends an invoice requesting payment; the buyer usually calls the same document a bill. Legally under GST, the formal document is a 'tax invoice' or a 'bill of supply'.
What is a bill of supply under GST?
A bill of supply is issued instead of a tax invoice when no GST is charged — for example by composition scheme dealers or when supplying exempt goods or services. It does not show any tax amount.
Can I claim input tax credit on a bill of supply?
No. Input tax credit can only be claimed on a valid tax invoice (or debit note) that shows GST charged. A bill of supply carries no tax, so there is no credit to claim.
Who issues an invoice?
The seller or service provider issues the invoice to the buyer after delivering goods or services, with payment terms and a due date.