Business Software
What a business quotation should include, a ready-to-follow format, a worked sample with GST, and the mistakes that cost businesses money — plus a free generator to build yours.
Checked against current rules for Quotation as a commercial offer rather than a GST tax invoice (tax invoice under Section 31 of the CGST Act and Rule 46 of the CGST Rules); current GST slabs of 5%, 18% and 40% (with 3% for precious metals and stones) effective 22 September 2025 on 29 September 2026. Source: CBIC — Section 31, CGST Act, 2017; Rule 46, CGST Rules, 2017; GST rate notifications 9/2025–16/2025 (Central Tax (Rate)).
A quotation is a document in which a seller offers to supply specific goods or services at stated prices and on stated terms, usually for a limited period. Businesses send one when a customer asks "how much will this cost?" — before any order is placed. If the customer accepts, the quotation becomes the reference for the order, the delivery and, eventually, the invoice.
A quotation is a commercial offer, not a GST tax invoice. It does not record a sale and it is not the document your customer uses to claim input tax credit. If you want to build one as you read, you can create a free quotation and download it as a PDF.
This article explains how quotations are generally prepared. It is not legal or tax advice for your specific deal — the contents of a quotation are largely a commercial choice, and only a tax invoice has statutory particulars under GST.
Nothing in the GST law prescribes a format for a quotation, so what you include is largely a commercial decision. The fields below are the ones that make a quotation clear and hard to dispute. Treat the first group as the working minimum and the second as useful additions where they apply to your business.
Free Quotation Generator
Create a professional quotation online for free — propose a price for goods or services, with or without GST, then preview, print or download it as a PDF.
What is a quotation in business?
A quotation is a document in which a seller offers to supply specific goods or services at stated prices and terms, usually valid for a set period. If the customer accepts within that period, the quotation becomes the basis of the order.
Is a quotation legally binding?
A quotation is an offer, and once the customer accepts it on its stated terms it can form the basis of a contract. Whether and how it binds you depends on its wording and the circumstances, so state the validity period and conditions clearly and take legal advice for high-value or unusual deals.
Do I charge GST on a quotation?
A quotation itself does not create a GST liability — tax is charged on the tax invoice you issue when the supply is made. Most GST-registered sellers still show the expected GST on the quotation so the customer sees the full amount they will pay.
Is a quotation a GST invoice?
No. A quotation is a price offer. The tax invoice for a taxable supply is a separate document issued under Section 31 of the CGST Act with the particulars in Rule 46 of the CGST Rules, and it is what your customer needs to claim input tax credit.
How long should a quotation be valid?
There is no fixed rule. Many businesses use 7 to 30 days, shorter where prices move quickly (metals, imports, forex-linked goods) and longer for stable services. Whatever you choose, write the exact date on the quotation.
What is the difference between a quotation and an estimate?
A quotation is generally a firm price for a stated period, while an estimate is an approximate figure that may change once the final scope is known. The terms are used loosely, so label the document clearly.
Free Estimate Generator
Create a professional estimate online for free — communicate expected pricing to a customer before work begins, with optional discount and GST or custom tax, then preview, print or download it as a PDF.
Free Proforma Invoice Generator
Create a professional proforma invoice online for free — a preliminary commercial document with optional GST estimate, then preview, print or download it as a PDF.
GST & Tax
Estimate vs Quotation: What's the Difference and When to Use Each?
How an estimate differs from a quotation, how both differ from a proforma invoice and a GST tax invoice, and which document to send at each stage of a sale.
GST & Tax
Quotation vs Proforma Invoice vs Tax Invoice: What's the Difference?
What a quotation, an estimate, a proforma invoice and a GST tax invoice each do, when to issue which, and why only a tax invoice lets your customer claim input tax credit.
A clean quotation reads top to bottom in the order a customer scans it: who is offering, who it is for, what is offered, what it costs, and on what terms.
| Section | What goes in it |
|---|---|
| Header | Business name, logo, address, contact details, GSTIN (if registered) |
| Document details | Quotation number, date, valid-until date, reference or subject |
| Customer details | Customer or company name, address, GSTIN (if applicable), place of supply |
| Line items | Description, HSN/SAC (if used), quantity, unit, rate, discount, tax rate, amount |
| Totals | Subtotal, discount, CGST + SGST or IGST, grand total |
| Terms | Payment terms, delivery terms, validity, exclusions, notes |
| Acceptance | Authorised signatory and how the customer confirms acceptance |
You can fill these sections without designing anything: the free quotation generator follows this layout and calculates the tax and totals for you.
Here is a realistic sample. A web studio in Maharashtra quotes a Maharashtra customer for a small business website. Because both are in the same state, the supply is intra-state, so 18% GST splits into 9% CGST and 9% SGST. (For a supply to another state, the same 18% would be charged as IGST — see how CGST, SGST and IGST work.)
| Item | Qty | Rate (₹) | Amount (₹) |
|---|---|---|---|
| Website design and development (5 pages) | 1 | 60,000.00 | 60,000.00 |
| Logo design | 1 | 10,000.00 | 10,000.00 |
| Annual hosting and maintenance | 1 | 12,000.00 | 12,000.00 |
| Subtotal | 82,000.00 | ||
| Discount (offered on the package) | −2,000.00 | ||
| Taxable value | 80,000.00 | ||
| CGST @ 9% | 7,200.00 | ||
| SGST @ 9% | 7,200.00 | ||
| Total | 94,400.00 |
The check: 18% of ₹80,000 is ₹14,400, which is ₹7,200 CGST plus ₹7,200 SGST, so the total is ₹80,000 + ₹14,400 = ₹94,400. The terms under the table might read: valid for 15 days from the quotation date; 50% advance (₹47,200) on acceptance and the balance on delivery; delivery within 25 working days of receiving content; domain registration and paid plug-ins not included.
GST rates depend on what you supply. The current main slabs are 5%, 18% and 40%, with 3% for precious metals and stones, so confirm the rate for your goods or services before quoting — this example uses 18% purely to illustrate the arithmetic.
A quotation is sent before the customer commits; an invoice is issued once a supply is made. Only a GST tax invoice records the sale, is what you report in your returns, and lets your customer claim input tax credit. A proforma invoice sits between the two as a preliminary document and is not a tax invoice either. The full comparison is in quotation vs proforma invoice vs tax invoice, and the mandatory particulars of a tax invoice are in what a GST invoice must contain.
Once the customer accepts, you may need a proforma invoice for an advance, or a purchase order from their side. When the supply is made, issue the tax invoice, and give a payment receipt for any money received. The purchase order guide explains the buyer's side of that exchange.
Re-read the quotation as the customer would: is the total unambiguous, is the deadline for acceptance visible, and is it obvious what happens next? If the scope is still uncertain, an estimate may suit the job better than a firm quotation — estimate vs quotation explains the difference. You can also create a free quotation in a few minutes and adjust it before sending.
Free GST Invoice Generator
Create a professional GST invoice online for free, with automatic CGST, SGST and IGST calculations.