What Is a Quotation?
Before any money changes hands, somebody has to put a price in writing.
A quotation is a written offer from a seller to a buyer listing the goods or services, the rates, the tax and the total, and holding those prices for a stated period. It is the seller’s commitment to that price while it stays valid, yet it creates no payment obligation for the buyer and no GST liability for either side.
That validity date is the line people skip. In India, where GST rates and input costs both move, a quote with no expiry is a price you have promised forever.
What Goes Into a Quotation
Seven fields carry the whole document, and each one closes an argument that would otherwise surface later.
| Field | Why it is there |
|---|---|
| Number | The reference the purchase order will quote back |
| Date | Fixes when the offer was made |
| Validity | How long the rate holds, stated as a date |
| Items | Description, unit and quantity being offered |
| Rates | Price per unit before tax |
| GST | The rate applied, and whether it is extra or included |
| Terms | Delivery timeline, payment terms, freight |
Any discount belongs on the face of the quote too, not in a follow-up message nobody can find in June.
At Petpooja, three omissions cause most of the trouble we see:
- No validity date, which leaves the rate open indefinitely
- No line saying whether GST is extra or included
- No delivery timeline, which becomes the next argument
Quotation vs Proforma Invoice
Both look like bills. Neither is one, and that catches out more buyers than sellers.
| Aspect | Quotation | Proforma invoice |
|---|---|---|
| Sent when | Before the buyer decides | After agreement, before supply |
| Job | To win the order | To confirm terms and arrange payment |
| Prices | Still open to negotiation | Fixed, close to final |
| Tax status | Not a tax document | Not a tax document |
| Leads to | A purchase order | The tax invoice |
The practical consequence is the same for both. A buyer cannot claim input tax credit against either one, only against the tax invoice that follows. Once the buyer accepts, the quote usually converts into a purchase order carrying the same rates.
Quotation Example
An illustrative office furniture dealer in Kankaria, Ahmedabad quotes a 12-seat office fit-out in May 2026.
Note: this is an invented example for illustration only. The dealer, quote number and every figure are made up.
Showing GST on the quote is normal practice and stops the buyer being surprised by Rs 35,262 later. A GST invoice value calculator works out that line quickly, and a GST invoice template shows what the final document must add.
Why a Quotation Is Not a Tax Invoice
Sending a quote does not put you on the hook for tax. Under the time of supply rules in Sections 12 and 13 of the CGST Act, published by CBIC, liability on goods arises when the tax invoice is issued or when it should have been, and Notification 66/2017 removed the advance-payment trigger for goods. For services, an advance received does move the date forward.
So a quotation sits outside all of it. No entry in your books, nothing in GSTR-1, no credit for the buyer.
The commercial risk is the opposite one. Quote a rate in May, let the buyer sit on it until August, and you are honouring an old price against new supplier costs, which is exactly what the validity line exists to prevent.
Turn Quotes Into the Best GST Invoices
A quotation only pays off if the accepted version becomes an invoice without the numbers drifting. Retyping rates at that point is where margin quietly leaks.
For retail businesses, Petpooja Invoice holds the pricelist your rates should come from, applies accurate and automatic GST calculations on every invoice, and generates e-invoices and e-way bills. For restaurants, Petpooja POSS keeps the same rate discipline at the counter.
Neither writes the quotation itself; that stays your document. What the best GST invoices need is a rate that never had to be typed twice, which is why owners move off manual billing first. Pull your last three quotes and check how many rates had drifted by the time they were billed.
Frequently Asked Questions
Less than most people assume. Under Section 5 of the Indian Contract Act, 1872, a proposal can be revoked any time before acceptance is communicated, so a seller may withdraw a quote even inside its validity window. Once the buyer accepts, usually by raising a purchase order, it becomes a contract binding both sides.
It is not required, since no tax is due yet, but stating the rate and whether it is extra or included avoids a dispute at invoicing. Leaving it silent is how an 18% surprise lands on the final bill.
An estimate is an approximation that can move, common in repairs and fit-outs where the full scope is unknown. A quotation is a firm price the seller stands behind for the stated period.
Fifteen to thirty days suits most trades. Shorten it when your input costs swing, because a ninety-day validity on volatile material is a promise you may not want to keep.
Yes, by issuing a revised quote with a new number and referencing the original. Editing the sent version breaks the trail, and the buyer may still hold you to the copy sitting in their inbox.
