luckpandaQuick answer
What is a quotation, and what should a quotation format include?
A quotation is a seller's written offer to supply goods or services at a stated price, on stated terms, for a limited time. A good quotation format shows the seller and buyer (with GSTINs), a quotation number and date, each item with HSN or SAC, quantity, rate and GST, the total, and the terms: validity, payment, delivery and freight. No GST is payable on a quotation; it only shows the GST the invoice will charge.
- It becomes a contract when the buyer accepts it, usually with a purchase order.
- Validity of 15 or 30 days protects you from old prices being accepted.
- Quote GST separately to businesses; give consumers the inclusive price too.
- When the order comes, the tax invoice repeats the same lines.
Last reviewed: · Also in: हिन्दी · தமிழ் · मराठी
On this page
- What a quotation is
- How to fill in this quotation format
- Quotation format with GST: what goes where
- Worked example: a quotation with GST
- GST on a quotation
- Terms and conditions to put on a quotation
- Quotation letter and email format
- Is a quotation legally binding in India?
- From quotation to invoice
- Quotation format in Excel or Word, or online
- Quotation vs estimate vs proforma invoice vs tax invoice
- Mistakes to avoid
- Key terms
- Questions people ask
What a quotation is
A quotation (often shortened to "quote") is the price a seller offers in reply to a buyer's enquiry or request for quotation (RFQ). It says what you will supply, at what rate, with what tax, and on what terms, and how long the offer stands. Once the buyer accepts it, usually by sending a purchase order that refers to it, the quoted price and terms become the contract.
In everyday Indian business the word covers several kinds of document:
| Kind | What it means | Typical use |
|---|---|---|
| Price quotation | Fixed prices for stated quantities | Most supply orders: furniture, machinery, IT hardware |
| Rate quotation | Unit rates without a fixed quantity, valid for a period | Rate contracts for consumables, transport per km, labour per day |
| Sealed or tender quotation | A formal bid in the buyer's format, opened together with others | Government and large-company purchases; the lowest valid bid is "L1" |
| Budgetary or reference quotation | An indicative price for planning, a loan or an approval | Bank loans, capex approvals, project estimates; say clearly it is not a firm offer |
| Estimate | A best guess where the final cost depends on the work | Repairs and construction; see estimate format |
A quotation is not a tax document. It has no GST liability, it does not go in GSTR-1, and it is not entered in your books as a sale. It is still worth keeping: it is the evidence of what was agreed.
How to fill in this quotation format
- Your businessReplace the sample with your business name, address and GSTIN.
- The buyerAdd the buyer with their GSTIN if registered. The first two digits decide whether the GST shows as CGST + SGST or IGST.
- ItemsAdd one line per item with the HSN or SAC code in the description, quantity, unit and rate. Tax and totals update as you type.
- GST ratePick the GST rate for each line (5%, 18% or 40% for most items after GST 2.0; 0% for exempt items).
- TermsWrite validity, payment, delivery, freight and warranty in the terms box, and reference the buyer's enquiry.
- Keep and sendSave the draft free. Sign in to number it, send it and turn it into the invoice when the order comes; issuing and sending need the Sales module.
Quotation format with GST: what goes where
- The word Quotation, so nobody treats it as an invoice.
- Quotation number from its own series (QT/…), not the invoice series.
- Validity date: after it, prices can be revised.
- Reference to the buyer's enquiry or RFQ number.
- Your name, address and GSTIN.
- The buyer, with GSTIN if registered (it decides CGST + SGST or IGST).
- HSN or SAC per line, the same codes the invoice will carry.
- GST shown, not charged: CGST + SGST within the state, IGST across states.
- Terms: validity, payment, delivery, freight, warranty.
- Signature of an authorised person.
| Section | What to write | Tip |
|---|---|---|
| Heading | "Quotation", quotation number, date | Use a series such as QT/2026-27/031 so quotes can be traced to orders |
| Seller | Business name, address, GSTIN, phone, email | The legal name on your GST registration |
| Buyer | Name, address, GSTIN if registered, contact person | Copy from their RFQ so the PO matches |
| Reference | Their enquiry or RFQ number and date | Purchase teams match quotes to RFQs |
| Items | Description, HSN/SAC, quantity, unit, rate, discount, taxable value | Specify make, model, size and grade; vague items invite disputes |
| Tax | GST rate per item; CGST + SGST or IGST | Business buyers need the split to estimate their input tax credit |
| Totals | Taxable value, GST, grand total, amount in words | State whether freight and installation are included |
| Terms | Validity, payment, delivery, freight, warranty, taxes | See the sample terms below |
| Signature | Name, designation, signature or company seal | Some buyers reject unsigned quotes in tenders |
Worked example: a quotation with GST
Sahyadri Steel Fabricators in Pune quotes Konkan Logistics in Thane for 40 heavy-duty racks at ₹6,250 each and ₹8,000 freight. Freight charged with the goods is part of a composite supply, so it takes the racks' 18% rate. Both GSTINs start with 27 (Maharashtra), so the GST is split into CGST and SGST.
Quotation QT/2026-27/031 (same state: CGST + SGST)
| Item | HSN/SAC | Qty | Rate | Taxable value | Tax |
|---|---|---|---|---|---|
| Heavy-duty steel storage rack, 5 shelves, 2000 x 900 x 450 mm | 9403 | 40 | ₹6,250.00 | ₹2,50,000.00 | ₹45,000.00 |
| Freight to Bhiwandi warehouse | 1 | ₹8,000.00 | ₹8,000.00 | ₹1,440.00 | |
| Taxable value | ₹2,58,000.00 | ||||
| CGST 9% | ₹23,220.00 | ||||
| SGST 9% | ₹23,220.00 | ||||
| Total | ₹3,04,440.00 | ||||
If the same racks were quoted to a buyer in Ahmedabad (GSTIN starting 24, Gujarat), the taxable value and the total would not change, but the tax line would be IGST at 18% instead of CGST and SGST:
The same quotation to a Gujarat buyer (inter-state: IGST)
| Item | HSN/SAC | Qty | Rate | Taxable value | Tax |
|---|---|---|---|---|---|
| Heavy-duty steel storage rack, 5 shelves, 2000 x 900 x 450 mm | 9403 | 40 | ₹6,250.00 | ₹2,50,000.00 | ₹45,000.00 |
| Freight to Bhiwandi warehouse | 1 | ₹8,000.00 | ₹8,000.00 | ₹1,440.00 | |
| Taxable value | ₹2,58,000.00 | ||||
| IGST 18% | ₹46,440.00 | ||||
| Total | ₹3,04,440.00 | ||||
GST on a quotation
- No GST is payable on a quotation. GST becomes due at the time of supply: for goods, when you issue the invoice or remove the goods; for services, when you invoice or receive payment.
- Show the GST anyway. A business buyer compares quotes on the price before GST because it will claim input tax credit; a consumer needs the inclusive price.
- Say "GST extra at the rate in force on the date of invoice". If the rate changes between quote and supply, the invoice uses the rate that applies at the time of supply. Many items moved to the 5% and 18% slabs from 22 September 2025, so quotes issued before that date and invoiced after it were invoiced at the new rate.
- Use the HSN or SAC you will invoice under. It lets the buyer check the rate and the eventual invoice.
- An advance against a quotation is not taxed for goods; for services, an advance is a supply event, so you issue a receipt voucher and pay GST on it.
- Composition dealers quote without GST and say "Composition taxable person, not eligible to collect tax on supplies".
Terms and conditions to put on a quotation
Most disputes about quotations are about what was not written down. Indian buyers expect these terms:
| Term | Common wording |
|---|---|
| Validity | Valid for 15 days from the date of quotation. |
| Prices | Ex-works Pune, exclusive of GST. GST at the rate in force on the date of invoice. |
| Freight | FOR destination (delivered to your site), or ex-works with freight extra at actuals. |
| Payment | 50% advance with the purchase order, balance before dispatch. Or: 30 days from invoice for approved accounts. |
| Delivery | Within 21 days of receipt of the purchase order and advance. |
| Installation | Included / not included; site to be ready with power and access. |
| Warranty | 12 months from delivery against manufacturing defects; excludes misuse and wear. |
| Price variation | Prices firm for the validity period. Orders after validity are subject to revision. |
| Acceptance | Please refer to this quotation number on your purchase order. |
| Jurisdiction | Disputes subject to Pune jurisdiction. |
In the editor above, put these in the terms box; they print under the totals exactly as typed.
Quotation letter and email format
A quotation is usually sent with a short covering letter or email. Keep the price in the quotation, not the email body, so there is one version of it:
For a revised quotation, keep the number and add a revision ("QT/2026-27/031 Rev 1") and say what changed, so the buyer cannot mix up versions.
Is a quotation legally binding in India?
Under the Indian Contract Act, 1872 a quotation is a proposal (an offer). It binds you only when the buyer accepts it on its terms. Until then you may withdraw it (section 5), and it lapses when its validity period ends (section 6). A purchase order that changes the price, quantity or terms is a counter-offer, not an acceptance: the contract is formed on whichever terms the other side then accepts, often by delivering or paying.
- Write a validity date, so a quote cannot be "accepted" months later at an old price.
- If the quote is only indicative, say so: "Budgetary quotation, not an offer".
- Check the purchase order against your quotation before you accept or dispatch.
- In tenders the buyer's terms usually prevail, and withdrawing a bid can forfeit the earnest money deposit (EMD).
From quotation to invoice
| Step | Document | GST effect |
|---|---|---|
| 1. Enquiry | Buyer's enquiry or RFQ | None |
| 2. Offer | Quotation (this page) | None |
| 3. Acceptance | Buyer's purchase order, referring to the quotation | None |
| 4. Advance (optional) | Proforma invoice to request it; receipt voucher for services | Services: GST on the advance |
| 5. Supply | Tax invoice, plus an e-way bill for goods above ₹50,000 | GST due; reported in GSTR-1 |
| 6. Payment | Receipt | None |
| 7. Corrections | Credit note or debit note | Adjusts GST |
In LuckPanda an accepted quotation keeps its lines, so the tax invoice starts from the same items, HSN codes and rates.
Quotation format in Excel or Word, or online
"Quotation format in Excel" and "in Word" are among the most searched variants. They work, but every quote made from a file is a copy you renumber, re-add and re-save by hand.
| Excel or Word file | This online format | |
|---|---|---|
| GST split | Formulas you maintain; CGST/SGST vs IGST chosen by hand | From the two GSTINs, per line |
| Numbering | Typed each time | Allocated in sequence when you issue |
| Indian number format | Depends on the cell format | ₹1,24,500.00 grouping always |
| Turning into an invoice | Copy and paste | Same lines carried into the invoice |
| Finding old quotes | Folders of files | Searchable by client, number and status |
If your buyer insists on their own Excel format (common in tenders), fill theirs and attach this quotation as the priced annexure.
Quotation vs estimate vs proforma invoice vs tax invoice
| Quotation | Estimate | Proforma invoice | Tax invoice | |
|---|---|---|---|---|
| Purpose | Firm offer of price and terms | Approximate cost | Confirms an order, asks for advance, supports customs or a loan | Charges for a supply |
| When | Before the order | Before the work | After the order, before supply | At supply |
| Binding | Yes, once accepted | Usually not | Commercially, yes | Yes |
| GST | Shown, not payable | Shown, not payable | Shown, not payable | Charged and reported |
| In GSTR-1 | No | No | No | Yes |
| Buyer's ITC | No | No | No | Yes |
Mistakes to avoid
- No validity date, so an old price is accepted after your costs have gone up.
- "GST extra" without the rate. Write the rate and the amount; the buyer budgets on it.
- Wrong tax type: IGST to a buyer in your own state, or CGST and SGST across states. The GSTINs decide it.
- Vague descriptions like "racks" or "website": specify size, make, model, scope and exclusions.
- Freight and installation left unclear: "ex-works" and "FOR destination" mean very different totals.
- Using the invoice number series for quotations, which leaves gaps in your invoice series.
- Accepting a purchase order without checking it against the quotation: it may be a counter-offer.
- Retyping the invoice from scratch after the order; copy the accepted lines so the invoice matches.
Key terms
- Quotation
- A seller's written offer of price and terms, valid for a stated period.
- RFQ (request for quotation)
- A buyer's request asking suppliers to quote for stated items and quantities.
- Purchase order (PO)
- The buyer's order accepting a quotation; it should quote the quotation number.
- Ex-works
- Price at the seller's premises; the buyer arranges and pays for transport.
- FOR destination
- Free on road to the buyer's site: the quoted price includes delivery.
- L1
- In tenders, the lowest valid bid.
- Validity
- The period during which the quoted prices and terms stand.
Questions people ask
Is GST charged on a quotation?
No tax is payable on a quotation; it is only an offer. Show the GST that will apply so the buyer sees the full cost. GST becomes payable when you issue the tax invoice or, for services, when you receive an advance.
Is a quotation legally binding in India?
Once the buyer accepts it, usually by issuing a purchase order on the same terms, it forms a contract under the Indian Contract Act, 1872. Before acceptance you can withdraw it, and it lapses at the end of its validity period.
What is the difference between a quotation and a proforma invoice?
A quotation is an offer made before the order. A proforma invoice usually follows the order: it confirms the price and asks for an advance, or supports an import, a loan or a bank process.
Should I quote rates inclusive or exclusive of GST?
For business buyers, quote exclusive of GST with the rate shown, since they claim input tax credit. For consumers, give the inclusive price as well.
What is the meaning of quotation in business?
A quotation is a seller's written price offer for specific goods or services, with terms and a validity period, given in reply to a buyer's enquiry. The buyer compares quotations and accepts one with a purchase order.
How long should a quotation be valid?
Fifteen or thirty days is usual. Use seven days or "subject to prior sale" for goods with volatile prices such as steel, copper or electronics, and say that orders after validity are subject to revision.
What is a rate quotation?
A quotation of unit rates (per piece, per kg, per km, per day) without a fixed quantity, valid for a period. Buyers use rate quotations for rate contracts and repeat purchases.
How do I number quotations?
Use a separate series from invoices, with the financial year, such as QT/2026-27/031. Add "Rev 1" for revisions instead of a new number, so every version of one offer stays together.
Do I need HSN codes on a quotation?
They are not legally required on a quotation, but showing the HSN or SAC you will invoice under lets the buyer check the GST rate and makes the invoice match the quote.
Can I download this quotation format in Excel or Word?
It is an online format: you fill it in here and it is kept as a document, which is what lets it number quotes, split GST and turn into an invoice. You can download it as a PDF free, with a small LuckPanda footer; the Sales module removes the branding.
What happens if the GST rate changes after I send a quotation?
The invoice charges the rate in force at the time of supply, not the rate on the quotation. Writing "GST at the rate in force on the date of invoice" in your terms makes that clear to the buyer.
What is a reference or budgetary quotation?
An indicative price given for planning, a loan application or an internal approval, not a firm offer. Mark it "Budgetary quotation, not an offer" so it cannot be accepted as one.