Purchase Order format under Indian GST (free template + checklist)

Quick frame: A PO is the buyer's formal commitment to buy. Once accepted, it is a contract. Get it right at issue and your accounts team avoids 80% of vendor-invoice disputes. Generate one with the Purchase Order Generator — under a minute, ₹19 clean PDF.

PO checklist — what to include

• PO number — continuous within the financial year.
• PO date + delivery date — leave no doubt.
• Buyer (your) details — name, GSTIN, address, contact.
• Vendor details — name, GSTIN, address.
• Line items — description, HSN, quantity, unit, unit price, line value.
• Tax row — GST rate per line. State CGST+SGST (intra-state) or IGST (inter-state).
• Total in figures and words.
• Payment terms — advance %, on delivery %, post-acceptance %.
• Delivery address — if different from buyer registered address (e.g., warehouse).
• Quality / acceptance criteria — short, but written.
• Penalty for delay (optional) — common in manufacturing POs.
• Authorised signatory — printed name + designation.

Why the GST split matters on a PO

If you write "Total: ₹1,18,000 incl. GST" and the vendor's GSTIN turns out to be in a different state, the actual tax flips from CGST+SGST to IGST. The numbers match, but your books split differently. State it explicitly:

Inter-state?	Show
Same state	Subtotal + CGST 9% + SGST 9% + Total
Different state	Subtotal + IGST 18% + Total

The GST Invoice Generator handles the split automatically — same logic applies to your PO.

Three-way matching (your accounts team will love you)

When the vendor invoice arrives, your accounts payable team does a three-way match:

1. PO — what you committed to pay
2. GRN (Goods Receipt Note) — what you actually received
3. Vendor invoice — what they are charging

If all three match within tolerance (typically ±5% on quantity, ±2% on value), the invoice is passed for payment. Mismatches go back to procurement for resolution. A clear PO = fewer mismatches.

Common PO mistakes

• No HSN code — your books need HSN-wise outward and inward details for GST returns.
• Vague description — "supply as per discussion" is not a description.
• Missing payment terms — vendor assumes 30 days, you assume 60. Conflict.
• Missing delivery date — defaults to "best efforts", which means "whenever".
• No place of supply — for services, this drives whether IGST or CGST+SGST applies.

What if the vendor sends extra goods?

A standard PO includes a +/- 5% tolerance clause. Beyond that, your goods receipt team rejects the excess (or escalates to procurement). Without the clause, the law doesn't decide for you — you must accept and pay or risk a dispute.

Related tools

• GST Invoice Generator
• Vendor Onboarding Form — onboard the vendor before the first PO.
• Delivery Challan Generator — when the vendor sends goods on approval.

Q. Is a PO legally binding? A. Yes, once accepted by the vendor (in writing or by performance, e.g., starting work). Until accepted, it is just an offer.

Q. Can I cancel a PO? A. Before acceptance, freely. After acceptance, you may face a cancellation fee or breach claim — terms depend on what the PO itself says about cancellation.