Purchase Order Format for Indian Businesses (Free Template)
A purchase order is the buyer's written offer to buy on stated terms, and once the supplier accepts it, it is the contract both sides are held to. In Indian B2B it is also the document that unlocks payment, because most accounts teams will not release funds against an invoice that has no purchase order behind it.
Why the PO decides who pays for a mistake
When goods arrive wrong, the purchase order is the reference: the specification on it, the quantity, the rate, the delivery date and the payment terms. Anything agreed on a phone call and not written on the purchase order is, in practice, unenforceable. The PO also carries the buyer's GSTIN, which the supplier needs to raise a compliant invoice, and the delivery address, which decides place of supply and therefore whether the tax is IGST or CGST plus SGST.
What the document must contain
- PO number and date (required): Suppliers quote it on the invoice; your accounts team matches on it.
- Buyer details and GSTIN (required): What the supplier will invoice against.
- Supplier details and GSTIN (required): Confirm it is active before the first order.
- Ship-to address (required): Decides place of supply when it differs from the billing address.
- Item, specification, quantity, unit (required): Specification is where disputes are won or lost.
- Rate and total value (required): State whether it is inclusive or exclusive of GST.
- Delivery date or schedule (required): Working days from the PO date, with partial delivery allowed or not.
- Payment terms (required): Credit days, and when the clock starts: invoice date or receipt of goods.
- Authorised signatory (required): Who in your company is allowed to commit this amount.
Frequently asked questions
Is a purchase order legally binding in India?
It becomes binding when the supplier accepts it, by confirming it or by starting supply. Until then it is an offer.
Is a purchase order the same as an invoice?
No. The buyer issues the purchase order before supply; the supplier issues the invoice at or after supply. Only the invoice carries GST and input tax credit.
Does a purchase order need GST details?
It should carry both parties' GSTIN and the ship-to address, because those decide what tax the supplier must charge.
Can a purchase order be cancelled?
Before acceptance, yes. After acceptance it depends on the terms written on it, which is why a cancellation clause is worth including.