Purchase order format for India: what to include (with a template)
Most small businesses in India buy on a WhatsApp message and a verbal price. It works until it does not — and when it does not, there is nothing to point at.
A purchase order is the document that turns a quote into an agreement. It is short, it takes five minutes, and it is the difference between a dispute you can settle and one you cannot.
What an Indian PO must contain
Your details and theirs. Legal entity names (not trade names), full addresses, and both GSTINs. A PO without the supplier's GSTIN is a problem at invoice-matching time, and an incorrect GSTIN can cost you input tax credit.
A PO number and date. Any consistent series is fine. This is what every later email, invoice and delivery note refers back to.
The line items, precisely. Description, HSN or SAC code, quantity, unit, unit price, and line total. The HSN code matters because it fixes the GST rate — get it wrong and the tax on the invoice will not match what you expected.
The tax treatment. State whether GST is CGST + SGST (supplier in your state) or IGST (inter-state), and the rate. Write the taxable value and the tax as separate figures, never one blended number.
Delivery. Full delivery address, the date or window, and who pays freight. "Ex-works" and "delivered" quotes differ by the entire cost of transport, so say which one this is.
Payment terms. The single most-skipped field, and the most expensive one. See below.
Acceptance and rejection. How goods will be inspected, and what happens to rejects. One line is enough: "Subject to inspection on arrival; rejected material to be collected and replaced within 7 days at supplier's cost."
A signature or written confirmation. An emailed PO the supplier replies "confirmed" to is a contract. Keep the thread.
The payment terms clause, done properly
Two things most buyers do not know:
- Silence does not mean 45 days — it means 15. With no written agreement, the MSMED Act gives you 15 days from acceptance. Writing the term down is what buys you longer.
- You cannot write more than 45 days for a micro or small supplier. A 60- or 90-day clause is unenforceable past 45, and paying late costs you the income tax deduction on the purchase plus non-deductible compound interest near 20% a year.
We have written that rule up in full: Section 43B(h) explained for buyers.
So a clean clause looks like:
Payment: 30 days from acceptance of goods. Supplier confirms Udyam registration status and category (micro / small / medium) on the invoice.
That last half-sentence is worth more than it looks. It puts the obligation to declare MSME status on the supplier, at the moment it matters, in writing.
A template you can copy
PURCHASE ORDER
PO number: PO/2026/001
Date: 01-04-2026
Buyer: [Legal name, Pvt Ltd]
Address: [Full address]
GSTIN: [Your GSTIN]
Supplier: [Legal name]
Address: [Full address]
GSTIN: [Supplier GSTIN]
Udyam no. / category: [if micro or small]
ITEMS
No. Description HSN Qty Unit Rate Amount
1 [Item, with specs] [code] 500 pcs 42.00 21,000.00
Taxable value: 21,000.00
CGST 9% / SGST 9%: 1,890.00 / 1,890.00 (or IGST 18%)
Freight: 0.00
TOTAL: 24,780.00
Delivery to: [Address]
Delivery by: [Date]
Freight terms: [Ex-works / delivered]
Payment terms: 30 days from acceptance of goods
Inspection: Subject to inspection on arrival; rejected material
to be replaced within 7 days at supplier's cost.
Authorised by: [Name, designation]
Adjust the tax rows to your state and rate. Everything else transfers as-is.
Before the PO comes the quote
A PO is only as good as the quote behind it. If you are still collecting prices, the free quote comparison tool puts them on the same footing — freight, GST and all — so you raise the PO against the genuinely cheapest supplier, not the lowest sticker price. And if you have not asked yet, the RFQ generator gets you comparable quotes in the first place.
This is general information, not legal or tax advice. Have your CA confirm the tax fields for your state and category.