GST on a fabrication quotation — what goes in the taxable amount
Where transport, installation and commissioning sit relative to the tax, why CGST and SGST or IGST depends on the site and not the customer, and the ordering that quietly changes the total.
The rate is the easy part. What causes arguments on a fabrication quotation is what the rate is applied to, and in what order — and that is decided by how the quotation is laid out, which means it is decided by whoever built the template.
This is a practical note on the shape of the document, not tax advice. Your chartered accountant has the final word on rates and classification for your specific work.
The ordering that matters
Nearly every mistake here comes from doing these five things in the wrong order:
- Line items
- Less discount
- Plus transport, installation, commissioning
- = Taxable amount
- Plus GST on the taxable amount
The one people get wrong is step three. Transport, installation and commissioning are commonly typed in after the tax, as though they were separate from the supply — an afterthought at the bottom next to the total.
Where the delivery and the installation are part of the same supply as the equipment, they form part of the value the tax applies to. Putting them after it understates the tax on the quotation. The customer signs one number, the invoice carries another, and somebody has to explain the difference at exactly the wrong moment.
Get the ordering right on the quotation and the invoice cannot disagree with it later.
Discounts: before, and stated
A discount agreed and shown on the face of the quotation reduces the value before tax. That is the straightforward case, and it is the case you want to be in.
A discount handed over afterwards — a credit note, a settlement adjustment, a gesture at the end of a job — is a different and messier animal, with conditions attached to whether it reduces the tax at all.
The practical consequence for how you quote: if there is going to be a discount, put it on the quotation. A shop that habitually quotes at list and then adjusts on the invoice is creating paperwork that has to be defended.
CGST and SGST, or IGST
The split follows where the supply is made, not where the customer’s head office is.
- Supply within your own state: CGST plus SGST, half each.
- Supply across a state line: IGST, at the combined rate.
The trap in fabrication is that the two are frequently different. A Mumbai hotel group’s purchase office places the order; the kitchen is in Nashik. A Bengaluru contractor’s job site is in Pune. It is the site that decides, and the site is a field on your quotation that somebody has to fill in correctly.
A quotation that carries the customer’s registered address but not the site address is missing the information needed to get this right. Both belong on the document.
The customer’s GSTIN
For a business customer this is not optional decoration — it is what lets them claim input credit, which is a material part of why they are buying from a registered supplier rather than an unregistered one.
A wrong or missing GSTIN on the eventual invoice is a real problem for the customer and a relationship problem for you. Capture it at quotation time, when you are talking to them anyway, rather than chasing it while trying to raise an invoice at month end.
Same for your own. Multiple registrations mean the right one has to appear, and which one is right follows from where the supply is made.
Rate and classification
Rates change and depend on what is actually being supplied. Two things worth knowing rather than assuming:
Fabricated equipment and job work are not always treated the same way. Supplying a finished counter is a different transaction from working on steel a customer sent you, and they are not necessarily at the same rate.
A composite supply takes the rate of its principal element. A quotation that bundles equipment, delivery and installation into one supply is generally taxed at the equipment’s rate rather than at three different rates — which is another reason the line between “part of this supply” and “separate supply” is worth being deliberate about.
Confirm both with your accountant for your own work. What matters here is that the quotation records the distinction, so the invoice does not have to guess.
What the quotation should carry
A fabrication quotation that will not cause an argument has all of this on it:
- Your GSTIN, and the customer’s.
- Both addresses, and the site address if it differs.
- Line items with quantity and rate, and the grade and gauge against each.
- The discount, shown, before tax.
- Transport, installation and commissioning shown inside the taxable amount.
- The taxable amount as its own line.
- CGST and SGST separately, or IGST, at the stated rates.
- The grand total.
- A validity date, so a price built on today’s steel is not held against you in six months.
Why this is a template problem, not a discipline problem
Every item above is something a person can get right by being careful, and something a person will eventually get wrong at five o’clock on a Friday with three quotations still to send.
The version that works is the one where the document computes it: charges land inside the taxable amount because that is where the template puts them, the tax splits into CGST and SGST or IGST because the site address decided it, and the grand total is arithmetic rather than typing.
Then the quotation you sent and the invoice you raise are the same numbers — which is the actual goal, and the reason any of this ordering matters at all.