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Estimate format: what it is
A quotation is a priced offer made before any work or delivery: the buyer accepts it, usually with a purchase order, and the accepted terms become the contract. No GST is payable on a quotation; it shows the GST that the tax invoice will charge. Approximate cost of a job, final bill on actual measurement.
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Example: a filled quotation
- The title says what the document is: a quotation.
- A reference from your own series.
- Your name, address and GSTIN.
- Who it is for.
- Each line: description, HSN/SAC, quantity, rate and taxable value.
- GST split by component: CGST and SGST in the same state, IGST across states.
- The total in the document's currency and format.
Worked example: the numbers behind the quotation above
| Item | Qty | Rate | Taxable value | Tax |
|---|---|---|---|---|
| Terrace waterproofing: surface prep, polymer membrane coating, 2 coats with fibre mesh at joints; per sq ft (estimated area) | 2,400 | ₹48.00 | ₹1,15,200.00 | ₹20,736.00 |
| Exterior painting: crack filling, primer and 2 coats acrylic exterior emulsion; per sq ft (estimated area) | 6,800 | ₹22.00 | ₹1,49,600.00 | ₹26,928.00 |
| Scaffolding, erection and removal, lump sum | 1 | ₹18,000.00 | ₹18,000.00 | ₹3,240.00 |
| Taxable value | ₹2,82,800.00 | |||
| CGST 9% | ₹25,452.00 | |||
| SGST 9% | ₹25,452.00 | |||
| Total | ₹3,33,704.00 | |||
GST is worked out per line and split into CGST and SGST (same state) or IGST (other state) from the two GSTINs.
How to fill in the estimate format
- Add your business name, address and GSTIN, and the client and site.
- List each item with its unit rate and the estimated quantity.
- Add GST if you are registered, so the client sees the full likely cost.
- State that the final bill follows actual measurement, set the validity, then save.
Estimate, quotation or proforma invoice?
| Document | Price | Used when |
|---|---|---|
| Estimate | Rates firm, quantities approximate | Scope depends on site conditions or measurement |
| Quotation | Fixed for the stated scope | The scope is clear and the buyer wants a firm figure |
| Proforma invoice | Final price before supply | The order is agreed and an advance or approval is needed |
Clauses a good estimate carries
- Rates are firm for the validity period; quantities are approximate
- The final bill will be on actual measurement, recorded jointly
- Any increase above 10% to be approved in writing before work continues
- Materials by brand and specification, such as two coats of acrylic exterior emulsion
- Who provides scaffolding, water and electricity
- Payment: advance, stage payments and balance on completion
- Validity: 15 to 30 days
Worked example
A Hyderabad contractor estimates terrace waterproofing for a housing society at ₹48 a sq ft on an estimated 2,400 sq ft (₹1,15,200), exterior painting at ₹22 a sq ft on 6,800 sq ft (₹1,49,600) and scaffolding at ₹18,000. Estimated value ₹2,82,800, GST at 18% ₹50,904, estimated total ₹3,33,704. If the terrace measures 2,250 sq ft, the waterproofing line on the final bill drops to ₹1,08,000.
What to put on a quotation, field by field
| Field | What to enter |
|---|---|
| Document title | Say exactly what it is: "Quotation". The title tells the buyer and the tax authority how to treat it. |
| Number and date | A reference number of your own series and the date. Quotes and proformas do not use the tax invoice series. |
| Your business | Name, address and GSTIN (state code is the first two digits) |
| Customer | Name, address and GSTIN if registered; for unregistered buyers, name, address and state |
| Lines | Description, quantity, unit and rate, with the HSN code for goods or SAC for services. Each line carries its own tax rate. |
| Tax | GST rate per line. Same state: CGST and SGST, half each. Another state or export: IGST. |
| Totals | Taxable value, tax by component and the total, in the document currency. Amounts in words are customary in India. |
| Terms | Validity period, delivery time, payment terms and what is excluded. |
India GST rules for a quotation
- A quotation is not a document under the GST Act: there is no GST liability and it is not reported in returns.
- Show the GST rate and amount that the tax invoice will charge, so a business buyer can see the input tax credit and a consumer the full price.
- An accepted quotation (usually followed by a purchase order) is a contract under the Indian Contract Act, 1872, on the quoted terms. State validity, delivery and exclusions.
Mistakes to avoid
- No validity date, so an old price can be accepted months later.
- Leaving tax out of the total without saying so.
- Vague scope: list what is included and what is not.
- Not converting the accepted quote into the invoice with the same lines.
Quotation vs other sales documents
| Document | When | Asks for payment | Tax document | In the books |
|---|---|---|---|---|
| Quotation / estimate | Before the order | No | No | No |
| Proforma invoice | After the order, before supply | Advance only | No | No |
| Invoice / tax invoice | On supply | Yes | Yes | Yes: sale and receivable |
| Receipt | When paid | No, confirms payment | No (receipt voucher for advances in India) | Yes: payment |
| Credit note | After an invoice, to reduce it | No, reduces what is owed | Yes | Yes: reverses part of the sale |
Questions people ask
What is the difference between an estimate and a quotation?
A quotation is a firm price for a defined scope. An estimate gives rates and approximate quantities, and the client pays for what is actually measured or done. Many Indian contractors call both an estimate, so say in the terms which one you mean.
Does GST apply to an estimate?
No tax is due on an estimate. Show the GST that will apply so the client can budget; it is charged on the tax invoice for the work actually done.
How much can the final bill differ from the estimate?
As much as the measured quantities differ, unless you agree a cap. A common clause is that any increase beyond 10% needs the client's approval before the work continues.
Who measures the work?
The contractor and the client, or the client's architect or society representative, measure together at the end of each stage and both sign the measurement sheet. The final bill follows those quantities.