Purchase order format

The sample shows a typical PO: both parties with their GSTINs, the items with HSN, quantity and agreed rate, the expected GST, and the delivery and payment terms. The supplier uses it to fulfil the order and should quote your PO number on the tax invoice.

“Recommended” here means what suppliers and your accounts team will expect, not a legal requirement. If you add your GSTIN and the correct State, the supplier’s invoice is more likely to charge the right tax type.

No. GST is charged on the supply. The documents that count for tax are the supplier’s tax invoice and, for later changes, the supplier’s credit notes and debit notes. A PO on its own does not create a GST liability, and you cannot claim input tax credit (ITC) against it.

Your ITC comes from the supplier’s tax invoice. You need to hold the invoice, receive the goods or services, and see the invoice in your GSTR-2B once the supplier has reported it. The other conditions of Section 16 of the CGST Act also apply.

The PO still matters for GST in practice. It is your record of the agreed price, quantity and tax. When the supplier’s invoice appears in the Invoice Management System (IMS) on the GST portal, comparing it with the PO tells you whether to accept it, reject it or keep it pending.

• Buying from a new supplier, so price and terms are on record from day one.
• Bulk or repeat purchases where rates change often.
• Spends above a limit that need a manager’s approval.
• Orders with delivery deadlines, quality specs or penalties.
• Any purchase where you want to match what was ordered, received and billed.

Checking these three against each other before you pay or accept an invoice is called a three-way match. It is the simplest way to catch overbilling and short supply.

1. 1

   Pick the supplier

   Confirm their GSTIN and State so the tax type (CGST + SGST or IGST) is right.

2. 2

   Number and date the PO

   Use a dedicated PO series so every order can be traced.

3. 3

   List the items

   Description, HSN, quantity, unit and the agreed rate.

4. 4

   Add tax and totals

   Show the expected GST so the supplier’s invoice can be checked against it.

5. 5

   Set delivery and payment terms

   Delivery date, address, payment days and any penalties.

6. 6

   Approve and send

   Get sign-off if the value needs it, then share the PO and ask the supplier to quote its number on the invoice.

• Booking the PO as a purchase. The purchase (and ITC) is recorded from the supplier’s tax invoice, not the order.
• Wrong State or missing GSTIN, which leads to the wrong tax type on the supplier’s invoice.
• Vague item descriptions that make it hard to match the invoice later.
• No PO number on the supplier’s invoice, so bills cannot be traced back to orders.
• Leaving old POs open, which overstates what you still expect to buy.

Purchase orders have their own list under Purchases in JustBill, with a separate number series and a validity date. GST is split into CGST + SGST or IGST from your State and the supplier’s, and the PDF is titled Purchase Order.

• Approval workflow. Set an approval threshold, and any PO above it waits for an admin. Admins are notified in the inbox and can approve (the PO then gets its number) or reject it with a reason.
• Convert to a purchase invoice. Once approved, or if no approval is needed, one click turns the PO into a purchase invoice with the same supplier and items. The PO is marked converted and linked to the bill. Then edit the bill to match the supplier’s invoice number and date.
• Stock. A PO does not move stock. Stock goes up when the purchase invoice is saved. See inventory management.
• Supplier balance. Open POs are shown separately from dues in the supplier’s ledger until they are converted.

Purchase bills then post to JustBill’s accounting ledgers. Compare plans on the pricing page.