Quotation Letter Format for Suppliers
A quotation letter tells a buyer exactly what you will supply and what it will cost — scope, prices, taxes, validity and terms. It is the pre-contract document on which every later dispute about price and scope is settled.
This page details the quotation letter format Indian suppliers use, the fields buyers compare, the GST treatment to show, and how a clear quote becomes an accepted purchase order — plus where it stands against the invoice that follows.
Buyers rank suppliers on the clarity of the quote before the quality of the goods; a confusing quotation loses without a site visit.
Quick steps to use this format
- 1
Set buyer and seller blocks
Capture both GSTINs, addresses and contacts so the quote can be referenced cleanly in the later PO and invoice.
- 2
Itemise the scope
One line per product or service with quantity, unit, HSN or SAC code and unit price.
- 3
Compute the tax lines
Total the subtotal, add CGST and SGST or IGST at the correct rate, and show the grand total.
- 4
State the three terms
Validity, payment schedule and delivery commitment in plain words with dates.
- 5
Number and send
Assign the next quote number, save the PDF with the number in the filename, and email it with a one-line cover.
Where a quotation letter sits before the invoice
The commercial sequence runs quotation, then purchase order, then invoice. The quotation sets expectations, the PO records acceptance, and the invoice claims payment. Business letters that blur these stages create the classic you-quoted-cheaper dispute.
The quotation letter is one type of business letter and follows the same skeleton — letterhead, date, subject, salutation — as the rest of your correspondence. For the seller it is also the sales document: the fields buyers compare across suppliers.
The fields every buyer compares first
Buyers do not read a quotation like a letter; they scan it like a price list. Every field they would need to compare you with another supplier should be present and legible.
A quote that forces a phone call to understand the total cost is already behind one that does not.
| Field | The buyer's question |
|---|---|
| Quote number and date | Can they reference this quote in a PO? |
| Itemised scope | Exactly what am I buying? |
| Unit price and total | How does the arithmetic compare? |
| GST line | What is my total landed cost? |
| Validity | How long does this price hold? |
| Payment terms | When do I pay, and how? |
| Delivery | When does it reach me? |
Itemising scope: quantities, units and HSN codes
Vague scope is the seed of every dispute: office furniture invites arguments that 36 workstations, 48 ergonomic chairs, 12 meeting tables in teak-finish laminate never does. Each line carries quantity, unit, description and HSN code.
Urban Desking Co. of Mumbai quotes a coworking operator in Andheri for 36 workstations at ₹6,200 each and 48 chairs at ₹1,250 each — line by line, so the buyer can verify every figure without a phone call.
- One line per distinct product or service
- Include quantity and unit — pieces, metres, man-days
- Add the HSN or SAC code for each line
Pricing arithmetic and the GST breakdown
Buyers compare total cost including tax, so the arithmetic must be transparent: subtotal, the tax components, then the grand total. A quote that omits the tax line loses to one that shows it.
Urban Desking's quote totals a subtotal of ₹2,83,200 — ₹2,23,200 for the workstations and ₹60,000 for the chairs. At 9% CGST (₹25,488) and 9% SGST (₹25,488), the tax adds ₹50,976 and the grand total comes to ₹3,34,176, valid for 30 days. That kind of transparent arithmetic is why buyers sign without negotiating the tax line.
Validity, payment terms and delivery commitments
Three commitments make a quote safe to accept: validity, payment terms and delivery. Validity protects you from price swings, payment terms define the advance and the credit window, and delivery fixes expectations for planning and for disputes.
A quote with no validity invites the buyer to return in three months and demand the old price; a quote with no delivery date leaves scheduling arguments open. State all three in plain words.
| Term | Common practice | Why it is stated |
|---|---|---|
| Validity | 15–30 days from quote date | Locks the price against input cost changes |
| Advance | 25–50% with the order | Covers material commitment |
| Balance | On delivery or 30 days credit | Matches industry cash cycles |
| Delivery | 7–21 days after PO or advance | Sets the planning and dispute baseline |
Five differences between a quotation and an invoice
Confusing a quotation with an invoice is the most expensive mix-up in small business billing. The quotation is an offer made before the order; the invoice is a tax document claiming payment after supply.
Keep the two documents visually distinct as well — a quotation leads with scope and validity, an invoice leads with the amount due and the payment deadline.
| Point | Quotation | Invoice |
|---|---|---|
| Stage | Before the order | After delivery |
| Document type | Offer, not a tax document | Tax invoice under GST law |
| GST purpose | Informational tax split | Basis for input tax credit |
| Changes | Price holds for the validity window | Needs a credit or debit note |
| Acceptance | Becomes a contract on buyer acceptance | Becomes a debt on the due date |
Options and add-ons: quoting beyond the base scope
Options are the quotation's appendix: the base scope first, then clearly separated add-ons, each with its own price and validity. The buyer compares the base line, and the add-ons are where good margins are made.
Metro Signworks of Chennai quotes a retail chain three sites of LED signage at ₹4,15,000 for the base, with a separate option of ₹68,000 for remote brightness control, so the buyer can approve the base now and revisit the option later.
Acceptance wording that turns a quote into a contract
A quotation becomes a contract when the buyer accepts within the validity period, typically by purchase order or signed acceptance. State that consequence in the letter itself: this quotation is an offer, valid for 30 days, and a PO referencing QUO-2026-0417 will be treated as acceptance.
Referencing the quote number on the PO is what links the documents at reconciliation. Metro Signworks refuses to ship without a PO that cites the quote number, which eliminates the we-never-ordered-that defence entirely.
Quotation errors that lose the order
Each error either confuses the buyer or leaves you exposed after supply. The cheapest fix is a checklist before sending; the costliest is a dispute after the goods have moved.
Three minutes of checking beats three months of argument, so run the same list on every quote regardless of how rushed the week is.
- Missing quote number or date
- Scope lines without units or quantities
- No tax line, or a wrong GST rate
- No validity, payment or delivery terms
Producing a professional quotation in minutes
The format is fixed, so production should be too: a letterhead, an itemised table, tax lines, terms and a quote number. The Crafex quotation generator assembles exactly this from your details and exports a PDF in under a minute.
Consistent quoting builds a reputation buyers trust — the same buyer who compares five quotes will quietly rank the clearest one first.
How to do it, step by step
- 1
Set buyer and seller blocks
Capture both GSTINs, addresses and contacts so the quote can be referenced cleanly in the later PO and invoice.
- 2
Itemise the scope
One line per product or service with quantity, unit, HSN or SAC code and unit price.
- 3
Compute the tax lines
Total the subtotal, add CGST and SGST or IGST at the correct rate, and show the grand total.
- 4
State the three terms
Validity, payment schedule and delivery commitment in plain words with dates.
- 5
Number and send
Assign the next quote number, save the PDF with the number in the filename, and email it with a one-line cover.
Frequently asked questions
What must a quotation letter include?+
Quote number and date, buyer and seller details, itemised scope with quantities and unit prices, the GST breakdown, validity, payment terms, delivery commitment and your contact. Add your bank details when the payment terms require an advance.
Is a quotation letter legally binding in India?+
Not by itself — it is an offer under contract law. It becomes binding when the buyer accepts within the validity period, typically by purchase order or signed acceptance, and both parties must then perform as quoted.
How long should a quotation stay valid?+
Common practice is 15 to 30 days. Shorter validity protects suppliers from input price swings; longer validity suits slow procurement cycles such as government tenders, where decisions take weeks.
How do I show GST on a quotation?+
Show the subtotal, then CGST and SGST at the applicable rate for intra-state supply, or IGST for inter-state, then the grand total. Buyers compare total cost, and a quote without the tax line forces them to ask or drop you.
What is the difference between a quotation and an invoice?+
A quotation is an offer made before the order; an invoice is a tax document claiming payment after supply. Quotations carry validity and terms, while invoices carry GSTIN details that support input tax credit claims.
How does a purchase order confirm my quotation?+
When the buyer's PO cites your quote number, it records acceptance of that scope and price, converting the offer into a contract. Ship only against a PO that references the quote; it is the record that defeats later disputes.
Start creating with the Business Letters tool
Design a professional letterhead for your business letters and quotations.
Free Letterhead GeneratorKeep reading
Related search terms
Why you can trust this guide
Written by Crafex Corporate Desk (Corporate Documentation Experts), last reviewed 2026-07-20. We update these guides when statutory rules and formats change. Where Indian regulations apply, we link the official sources below. Verify critical calculations against the current government notifications before relying on them.
A Crafex editorial guide for Indian professionals and businesses.