Billing
How to Write a Quotation: Format, Validity and Example
What a quotation should contain, how long it should stay valid, how it differs from an estimate and a proforma invoice, with a worked GST example.
In short
A quotation is a seller's written offer to supply goods or services at a stated price, on stated terms, until a stated date. A clear one names both parties, lists each item with HSN code, quantity, rate, discount and the GST that will apply, and states validity, delivery and payment terms. It creates no GST liability; the tax invoice is issued only when the order is supplied.
- A quotation is an offer; once the buyer accepts it, its prices and terms bind the seller.
- Always state a validity date, so a quote cannot be accepted months later at old prices.
- Show the GST rate and amount so the buyer compares landed cost, not base price.
- A quotation is not a GST document: no tax is payable on it and it is not reported in GSTR-1.
- Give quotations their own number series, separate from tax invoices.
What is a quotation?
A quotation is a seller’s written offer to supply specific goods or services at a stated price, on stated terms, until a stated date. It answers a buyer’s enquiry — “what would 200 units cost, delivered?” — in a form the buyer can compare, approve and turn into a purchase order.
A good quotation wins orders on its own. A vague one starts a round of calls asking what is included.
You can send one today with the free quotation generator.
What a quotation should contain
- The word “Quotation”, a quotation number and the date.
- Your business name, address, GSTIN, phone and email.
- The buyer’s name, address and GSTIN, and the person the quote is addressed to.
- A reference to the buyer’s enquiry, if they sent one.
- For each item: description, HSN or SAC code, quantity, unit, rate and discount.
- Taxable value, the GST rate and amount, and the total.
- Validity — “valid until 31 October 2026”.
- Delivery terms — lead time, and whether freight is included.
- Payment terms — advance, credit period, mode.
- Any exclusions — installation, loading, insurance.
- Signature or name of the person issuing it.
Show GST, even though none is due yet
A quotation creates no tax liability, but a buyer comparing three quotes wants to compare the landed cost. If one quote shows ₹1,00,000 “plus GST” and another shows ₹1,15,000 inclusive, the buyer has to do the arithmetic — and may get it wrong in your competitor’s favour. Show the rate and amount line by line.
A worked example
Quotation QT-0142 — 3 October 2026 — valid until 18 October 2026
| Item | HSN | Qty | Rate (₹) | Discount | Taxable value (₹) | GST |
|---|---|---|---|---|---|---|
| HDPE drum, 200 L | 3923 | 50 | 1,800 | 5% | 85,500 | 18% |
| Drum cap set | 3923 | 50 | 60 | — | 3,000 | 18% |
| ₹ | |
|---|---|
| Taxable value | 88,500 |
| CGST 9% | 7,965 |
| SGST 9% | 7,965 |
| Total | 1,04,430 |
Delivery within 7 working days of order; freight extra at actuals. 50% advance with order, balance before dispatch.
The buyer here is in the same state, so the tax is split into CGST and SGST. For a buyer in another state, the same 18% would be shown as IGST.
How long should a quotation be valid?
Set the validity by how fast your costs move:
| Business | Typical validity |
|---|---|
| Raw materials, metals, plastics | 3–7 days |
| Manufactured goods with stable costs | 15–30 days |
| Services and projects | 30 days |
A quote with no validity date can be accepted at its old price long after your costs have changed.
Quotation vs estimate vs proforma invoice
| Estimate | Quotation | Proforma invoice | |
|---|---|---|---|
| Price | Approximate | Fixed | Fixed |
| When | Early, scope unclear | After an enquiry | After the buyer agrees in principle |
| Binding once accepted | Usually not | Yes | Yes |
| Typical use | Repairs, construction | Comparing suppliers | Requesting an advance |
The proforma invoice guide explains the step that often comes next.
From quotation to invoice
Once the buyer accepts, the quotation usually becomes:
- A purchase order from the buyer, quoting your quotation number.
- A sales order on your side, if you track open orders.
- A delivery challan if goods go out before billing.
- The tax invoice, at the time of supply.
Each step should carry the same items and prices. Retyping them at every stage is where mistakes creep in.
Common mistakes
- No validity date.
- “Plus GST” without the rate, so the buyer cannot work out the total.
- No HSN code, so the buyer cannot check the rate you will charge.
- Freight, loading or installation left unclear, which turns into an argument at billing.
- Using the invoice number series for quotations.
How VyapRise handles quotations
In VyapRise, a quotation is a document with its own number series. When the buyer accepts, it converts into a sales order, a delivery challan or a tax invoice with every item, rate and discount carried over, and the quotation is marked as converted so you can see which quotes turned into business. Quotations are part of the Pro plan (a yearly plan) and open during the free trial.
For a single quotation without an account, use the free quotation generator.
Frequently asked questions
Is GST charged on a quotation?
No. A quotation is an offer, not a supply, so no tax is due when you send it. It should still show the GST rate and amount that will apply, so the buyer knows the full price. Tax becomes due when the tax invoice is issued.
How long should a quotation be valid?
Long enough for the buyer to decide, short enough that your costs do not move under you. Fifteen to thirty days is common for goods with stable prices; for raw materials whose prices move weekly, seven days or less.
What is the difference between a quotation and an estimate?
An estimate is an approximate cost that may change once the work is understood — common for repairs and construction. A quotation is a fixed price for a defined scope. If the price could change, call it an estimate and say what would change it.
Is a quotation legally binding?
It is an offer. Once the buyer accepts it within its validity period, the seller is bound to supply at the quoted price and terms. Before acceptance, the seller can withdraw or revise it.
Should a quotation have a number?
Yes. A number lets both sides refer to it in emails, purchase orders and the final invoice. Use a series of its own, such as QT-0001, so it never mixes with your tax invoice numbers.