Can I use one bill for both taxable and exempt items?

Yes, but only if your customer is not registered for GST. Then you can make one combined "invoice-cum-bill of supply". If your customer has a GSTIN, make two bills: a tax invoice for the taxable items and a bill of supply for the exempt ones.

I charged GST on a bill of supply by mistake. What do I do?

A bill of supply must never show GST. Cancel that bill, make a new one with no tax, and give back any tax the customer paid. If the tax has already gone into your returns, ask your CA how to fix it.

Does a credit note change the old invoice?

No. The old invoice stays as it is. The credit note is a new paper that names the old invoice by number and date and reduces the amount. That is why the note must always quote the invoice it corrects.

Can the buyer take GST credit on a debit note?

Yes. A debit note that adds GST works like the original invoice, so the buyer can claim credit on it. But the buyer has a time limit for claiming credit, so do not issue debit notes late.

Do these four bills use the same numbers?

No. Each type has its own number series, for example INV-0001, BOS-0001, CN-0001 and DN-0001. Numbers in each series run one after another and are never repeated in a financial year. Keeping them separate also makes your GSTR-1 document summary easy to fill.

Bill of Supply vs Tax Invoice vs Credit/Debit Note

Four GST papers look similar but do different jobs. A tax invoice charges GST. A bill of supply charges none. A credit note reduces an earlier bill. A debit note increases it. Use the wrong one and your customer can lose GST credit, or you can end up owing tax you never collected.

This post explains each one in plain words and ends with a simple way to choose. If you also want to know about quotations and purchase orders, see purchase order vs quotation vs invoice.

The short answer

Paper	Who issues it	When	Shows GST?	Buyer gets GST credit?
Tax invoice	Normal GST-registered seller	Every taxable sale	Yes	Yes
Bill of supply	Composition dealer, or seller of exempt items	Composition sales, exempt sales	No	No
Credit note	Seller	Earlier bill was too high, goods came back, or the service was poor	Reduces GST	Buyer's credit goes down
Debit note	Seller	Earlier bill was too low, or extra money is due	Adds GST	Yes, if it shows GST

The first two are your main bills. The last two fix a bill you already gave.

Tax invoice: the normal bill

If you are registered for GST in the normal way and you sell something that carries GST, you give a tax invoice. It shows your GSTIN, the buyer's details, a bill number, the HSN or SAC code, the price, and the GST split into CGST and SGST (or IGST).

This is the paper the buyer needs to claim GST credit. You can make one with the GST Invoice Generator or the Invoice Generator.

Bill of supply: a bill with no GST

You give a bill of supply instead of a tax invoice in two cases:

You are a composition dealer. You pay a small share of your turnover as tax, so you cannot charge GST to the customer.
You sell something that is exempt from GST. There is no GST on it, so none can be shown.

A bill of supply has no tax columns. It shows your name, address and GSTIN, a bill number and date, the buyer's details if they are registered, what you sold with its HSN code, the amount, and your signature.

A composition dealer must also print this line on every bill: "composition taxable person, not eligible to collect tax on supplies." The Bill of Supply Generator adds it when you tick the composition box. To see if composition suits you, try the composition scheme calculator or read the composition scheme guide.

The buyer gets no GST credit

There is no GST on a bill of supply, so the buyer has nothing to claim. A business that buys from a composition dealer cannot take GST credit on that purchase. This is why some business buyers prefer regular sellers.

Selling taxable and exempt items together

If a sale has both kinds of items:

Buyer has a GSTIN: make two bills. A tax invoice for the taxable items and a bill of supply for the exempt items.
Buyer has no GSTIN: you may make one combined bill, called an invoice-cum-bill of supply.

Very small sales

If a sale is under ₹200, the customer is not registered, and the customer does not ask for a bill, you do not have to give one. At the end of the day, make a single bill of supply that covers all such sales.

Credit note: when the bill was too high

A seller gives a credit note when an earlier bill needs to come down. For example:

the price or the GST was charged too high,
the customer returned the goods,
the goods or service were not up to the mark.

The note must show the old invoice number and date, the amount and GST being reduced, and its own number and date. The Credit/Debit Note Generator has a field for each.

Two things to remember:

The seller makes it, not the buyer. If a customer returns goods, they send the goods back and the seller then issues the credit note.
There is a deadline. To reduce your GST with a credit note, issue it by 30 November after the end of that financial year, or by the date you file your annual return, whichever comes first. Show it in the GSTR-1 of the month you issue it, not the month of the old invoice. The buyer's GST credit goes down by the tax on the note.

A discount given after the sale needs care. It counts as a price reduction only if it was agreed before the sale and is tied to particular invoices. Ask your CA if you are unsure.

Debit note: when the bill was too low

A debit note is the opposite. The seller gives it when the earlier bill charged too little, such as a wrong rate or freight that was left out, or when extra money becomes due. It also names the old invoice. Because it adds GST, the buyer can claim credit on it, just like on the invoice.

A debit note has no 30 November deadline for the seller. The buyer still has a time limit to claim credit, so issue it soon.

Which one should I use?

Is this a new sale?
- You are on the normal scheme and the item carries GST: tax invoice.
- You are a composition dealer, or the item is exempt: bill of supply.
- You are not registered for GST: a plain bill. None of these GST papers apply.
Are you fixing a bill you already gave?
- It was too high, goods came back, or service was poor: credit note.
- It was too low, or extra is due: debit note.

Four mistakes to avoid

Showing GST on a bill of supply. It must show no tax, and a composition dealer cannot collect any.
Giving a bill of supply for a taxable sale. If you are on the normal scheme, the buyer needs a tax invoice to claim credit.
Changing the old invoice. Once given, an invoice is fixed with a credit or debit note that names it.
Issuing a credit note too late. After the deadline it no longer reduces your tax.

Sources

This post is correct as of 16 October 2026. It explains the usual rules in simple words and is not legal or tax advice. Check the CGST Act and Rules, or ask your CA, before relying on it for your own case.