Purchase Order Format

Purchase order format

This format works for goods and services. Buyers can issue it as is; suppliers can send it to a customer who orders by phone and ask them to sign and return it.

PURCHASE ORDER

Buyer: [BUYER COMPANY NAME]
Address: [BUYER ADDRESS]
GSTIN: [BUYER GSTIN]   PAN: [BUYER PAN]
Contact: [NAME, PHONE, EMAIL]

PO No.: [PO NO.]
PO Date: [DATE]
Quotation ref.: [SUPPLIER QUOTATION NO.] dated [DATE]

Supplier: [SUPPLIER NAME]
Address: [SUPPLIER ADDRESS]
GSTIN: [SUPPLIER GSTIN]
Udyam Registration No. (if MSME): [UDYAM NO.]

Ship to / Place of delivery: [DELIVERY ADDRESS, STATE, STATE CODE]
Bill to: [BILLING ADDRESS, GSTIN]

S.No. | Description / specification | HSN/SAC   | Qty   | Unit | Rate (Rs.) | Amount (Rs.)
1     | [ITEM DESCRIPTION]          | [HSN/SAC] | [QTY] | [UOM]| [RATE]     | [AMOUNT]
2     | [ITEM DESCRIPTION]          | [HSN/SAC] | [QTY] | [UOM]| [RATE]     | [AMOUNT]

Sub-total:                Rs. [AMOUNT]
GST @ [RATE]% ([CGST+SGST / IGST]): Rs. [AMOUNT]
Freight / packing:        Rs. [AMOUNT or "Included" / "Extra at actuals"]
Total PO value:           Rs. [AMOUNT]
Amount in words: Rupees [AMOUNT IN WORDS] only

TERMS AND CONDITIONS
1. Delivery: on or before [DATE] at the delivery address above. Part deliveries [allowed / not allowed].
2. Price: [firm / subject to price-variation clause], [inclusive / exclusive] of GST.
3. Payment: [100% within [CREDIT DAYS] days of receipt of goods and invoice / [X]% advance, balance within [CREDIT DAYS] days]. Payment by NEFT/RTGS to the supplier's account stated on the invoice.
4. Inspection: goods will be inspected within [NUMBER] days of receipt; any rejection will be notified in writing within that period, failing which goods are deemed accepted.
5. Documents with each delivery: tax invoice, delivery challan / e-way bill, packing list, [test certificate].
6. Warranty: [WARRANTY TERMS].
7. Late payment: interest at [RATE]% per annum on amounts unpaid after the due date [for MSME suppliers: as per Section 16 of the MSMED Act, 2006].
8. Disputes: subject to the jurisdiction of courts at [CITY] [or arbitration clause].

Please sign and return a copy as acceptance of this order.

For [BUYER COMPANY NAME]
Authorised signatory: ____________________   Name: [NAME]   Designation: [DESIGNATION]

ACCEPTED by [SUPPLIER NAME]
Signature: ____________   Name: [NAME]   Date: [DATE]   Seal:

How to fill it

1. Give every PO a unique number and refer to the supplier's quotation, so the PO and quotation together form one contract.
2. Use the exact legal name and GSTIN of both parties. Suppliers should verify the buyer's GSTIN before accepting an order from a new customer.
3. Describe items precisely, with HSN/SAC, quantity, unit and rate. Vague descriptions lead to quality disputes later.
4. State whether prices include GST, freight and packing.
5. Write the payment terms in days from a fixed event (receipt of goods, invoice date or acceptance). For a micro or small supplier registered on Udyam, the agreed credit period cannot exceed 45 days under Section 15 of the MSMED Act.
6. Have it signed by someone with authority to commit the buyer, and get the supplier's acceptance back.

Common mistakes

• Supplying on a verbal order. Without a PO, the buyer can later deny the order, the rate or the quantity. See verbal order, no PO.
• Conflicting terms. The quotation says 30 days, the PO says 90 days, and nobody notices. Reply in writing to any PO term you do not accept before you dispatch.
• No inspection window. Without a clause like term 4, quality complaints can surface months later, usually when payment is due.
• Signature by a junior employee with no authority. Ask for the signatory's designation, or confirm the order by email from the buyer's official domain.

Why a PO protects the supplier's payment

When an invoice goes unpaid, the advocate's first question is 'where is the order?'. A signed purchase order proves the contract, the price and the credit period, and fixes the due date from which interest runs. Together with the delivery challan or GRN and the tax invoice, it gives the complete chain a court or the MSME Facilitation Council expects. A suit on a written contract for a liquidated sum can be filed as a summary suit, which is faster than an ordinary civil suit.

For micro and small suppliers, a PO that states credit days is also the starting point for interest under Section 16 of the MSMED Act: if payment is late beyond the agreed period (no more than 45 days), compound interest at three times the RBI bank rate runs from the appointed day.

If you hold a PO and delivery proof and are still unpaid, FundRaksha Legal sends the notice within 24 hours, for a 30% success fee.