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What is a GST quotation?
A GST quotation is a pre-sale document or commercial offer issued by a supplier to a potential customer. It outlines the estimated prices, applicable GST rates, HSN/SAC codes, and terms of delivery before a formal order is placed. Unlike a tax invoice, a quotation is purely for price discoveryand does not create a tax liability or ITC eligibility.
Quotation vs GST Tax Invoice
| Point of Difference | GST Quotation | GST Tax Invoice |
|---|---|---|
| Primary Purpose | Price estimate & commercial offer | Formal tax & demand document |
| When is it issued? | Before sale/order confirmation | At the time of supply of goods/services |
| Can be used for ITC? | No — ITC cannot be claimed from a quotation | Yes — if issued correctly as a valid tax invoice |
| GST Liability | No liability created for supplier | Creates tax liability to be paid to govt |
| Invoice Series | Internal business series | Mandatory sequential series per FY |
Quotation format fields checklist
Sample GST quotation reference
| Item / Service | HSN/SAC | Qty | Taxable Val | GST % | GST Amt | Total |
|---|---|---|---|---|---|---|
Premium Office Chair (Intra-state) MH to MH Quote | 9401xx | 5 Units | ₹25,000 | 18% | ₹4,500 | ₹29,500 |
Logo Design Project (Service) Service Estimate | 9983xx | 1 Project | ₹10,000 | 18% | ₹1,800 | ₹11,800 |
Laptop Workstation (Inter-state) MH to KA Quote | 8471xx | 2 Pcs | ₹80,000 | 18% | ₹14,400 | ₹94,400 |
GST calculation in quotations
Exclusive GST Quote
The most professional method. Show the base price first, then add GST as a separate line item. This makes the cost-to-company (after ITC) clear to the buyer.
Inclusive GST Quote
Common in retail/B2C. Show a single total price that includes tax. Use the reverse GST tool to find the base price for internal accounting.
Reverse GST ToolHSN/SAC in quotation
While not legally mandatory on a quotation, including HSN (for goods) orSAC (for services) is highly recommended. It fixes the tax rate early and helps both parties understand the expected GST impact on the final invoice.
Terms, validity, and notes
A professional quotation is incomplete without clear business terms. These protect the supplier from market fluctuations and define the scope of work.
Convert quotation to GST invoice
A typical compliant billing cycle follows this sequence. Once the buyer approves the quote, ensure all final tax details are verified before issuing the tax document.
Common quotation mistakes
Frequently asked questions
Is a GST quotation legally valid?
A quotation is a commercial offer and is not a "legal" tax document like a GST invoice. However, once accepted, it may form a binding contract between the parties. It cannot be used to file GST returns.
Can a quotation be used to claim Input Tax Credit (ITC)?
No. ITC can only be claimed based on a valid GST Tax Invoice issued as per Rule 46 of the CGST Rules. A quotation is purely for price estimation and order confirmation.
Should GST be shown separately in a quotation?
Yes, it is best practice to show the taxable value and the estimated GST amount separately. This helps the buyer understand the total cost and their potential ITC eligibility once the final invoice is issued.
Is a quotation number mandatory?
While not legally required by GST law (as quotations aren’t tax documents), having a sequential quotation number is essential for business tracking and professional record-keeping.
Can I convert a quotation to a GST invoice?
Yes. Most businesses follow the workflow of: Quotation → Customer Approval → Order Execution → Final Tax Invoice. Our GST Invoice Generator helps you prepare both formats.
What is the difference between a quotation and a proforma invoice?
A quotation is a preliminary offer of price/terms. A proforma invoice is more formal and often used as a "dummy" invoice to request advance payment before the actual supply.
Should HSN/SAC be included in a quotation?
Yes. Including HSN/SAC in a quotation helps clarify the applicable GST rate to the buyer and reduces the risk of tax split disputes later during the final billing.
Can the GST rate change after a quotation is issued?
Yes. If the government changes GST rates or rules between the quotation date and the actual supply date, the final invoice must reflect the rates applicable at the time of supply.
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Sources & Methodology
Quotation format is a practical commercial document. While tax invoices are regulated under Section 31 of the CGST Act, pre-sale estimates are subject to general contract law and business practices. Always verify final invoicing requirements via theGST Portaland CBIC.
Review our Accuracy Policy,Disclaimer, and GST Invoice Guidebefore finalizing business documents.
Next steps for pre-sales
Draft quotations, back-calculate GST, or find the correct HSN/SAC code.
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