If you run a business in India and are registered under GST, every sale you make requires a specific legal document called a GST invoice. It is not just a receipt — it is the foundation of the entire Goods and Services Tax system. Your customers need it to claim input tax credit (ITC), the government uses it to track tax compliance, and you need it to file your returns correctly.
Yet many business owners — especially freelancers and small business owners new to GST — create invoices that are technically non-compliant without realising it. To see real-world invoice samples with correct GST calculations, check out our invoice examples for Indian businesses. A missing GSTIN here, a wrong tax breakdown there, and your customer cannot claim their ITC. That creates disputes, delays payment, and damages the professional relationship.
This guide explains exactly what a GST invoice is, who needs to issue one, what it must contain, and how to create one correctly every time.
A GST invoice (also called a tax invoice under GST) is a formal document issued by a GST-registered supplier to the buyer at the time of selling goods or providing services. It serves as the official record of the transaction and contains details of the goods or services supplied, the applicable GST rate, the amount of tax charged, and the total payable amount.
Under the Goods and Services Tax (GST) regime, which replaced the earlier VAT, service tax, and excise duty system in India from July 2017, the tax invoice is the primary document for:
Any person or business that is registered under GST and makes a taxable supply of goods or services must issue a GST invoice. This includes:
If you are registered under the Composition Scheme, you cannot issue a regular GST tax invoice — you must issue a Bill of Supply instead. Composition dealers cannot collect GST from customers; they pay tax from their own margin at a flat rate. The Bill of Supply must be marked "Composition Taxable Person, not eligible to collect tax on supplies."
If your annual turnover is below the GST registration threshold and you are not voluntarily registered, you do not issue a GST invoice — you issue a regular invoice without GST. However, once you cross the threshold, you must register within 30 days and start issuing proper GST invoices.
Rule 46 of the CGST Rules, 2017 specifies the exact information that must appear on every GST tax invoice. Here are all 16 mandatory fields:
| # | Field | Details Required |
|---|---|---|
| 1 | Name and Address of Supplier | Your registered business name and GST-registered address |
| 2 | GSTIN of Supplier | Your 15-digit GST Identification Number |
| 3 | Invoice Number | A consecutive serial number — unique, not exceeding 16 characters, letters, numerals, special characters allowed. Must restart each financial year. |
| 4 | Invoice Date | Date on which the invoice is issued |
| 5 | Name and Address of Recipient | Your customer's registered name and billing address |
| 6 | GSTIN or UIN of Recipient | Required if the recipient is GST-registered. If unregistered, show state code and PAN for inter-state supplies over ₹50,000. |
| 7 | Place of Supply | The state where the supply is deemed to take place — determines CGST+SGST vs IGST |
| 8 | HSN/SAC Code | HSN (Harmonized System of Nomenclature) for goods or SAC (Services Accounting Code) for services. Mandatory based on turnover slab. |
| 9 | Description of Goods/Services | Clear description of each item or service supplied |
| 10 | Quantity and Unit | Quantity of goods in units (kg, litres, pieces, etc.) or units of service |
| 11 | Total Value | Gross value of supply before discount |
| 12 | Taxable Value | Value after applying any discounts — this is what GST is calculated on |
| 13 | Applicable Rate of Tax | The GST rate applicable: 5%, 12%, 18%, or 28% |
| 14 | Amount of Tax Charged | Broken out as CGST + SGST (intra-state) or IGST (inter-state) |
| 15 | Whether Tax is Payable on Reverse Charge | Yes/No — required field even if No |
| 16 | Signature or Digital Signature | Signature of the supplier or authorised representative (physical or digital) |
One of the most common points of confusion for new GST registrants is knowing which type of tax to charge. The rule is straightforward:
When the supplier's place of business and the place of supply are in the same state, you charge both CGST (Central GST) and SGST (State GST) — each at half the applicable rate. For example, on an 18% GST transaction: CGST = 9% + SGST = 9%.
When the supplier and the place of supply are in different states, you charge IGST (Integrated GST) at the full rate. For example: IGST = 18% on the entire amount.
HSN codes (for goods) and SAC codes (for services) help the government classify supplies and apply the correct tax rate. How many digits you need to show depends on your annual turnover:
| Annual Turnover | HSN/SAC Digits Required |
|---|---|
| Up to ₹5 crore | 4-digit HSN/SAC (mandatory from April 2021) |
| Above ₹5 crore | 6-digit HSN/SAC |
| All exporters | 8-digit HSN |
SAC codes for common services: IT software services (998314), consulting (998311), graphic design (998392), legal services (998211), accounting (998222). You can look up HSN/SAC codes on the GST portal.
GST law specifies when you must issue the invoice — issuing it too late is a compliance violation:
From August 2023, e-invoicing is mandatory for all GST-registered businesses with annual aggregate turnover above ₹5 crore. E-invoicing does not mean generating a PDF — it means uploading your invoice data to the Invoice Registration Portal (IRP) and receiving an Invoice Reference Number (IRN) and QR code.
The process works like this:
There are actually several types of documents under GST, and it is important to use the right one:
Wrong or missing GSTIN. Double-check both your own GSTIN and your customer's GSTIN before issuing. A wrong GSTIN means the ITC goes to the wrong entity or cannot be claimed at all. For a broader look at tax compliance across GST, VAT, and sales tax, see our tax compliance guide for small businesses.
Wrong place of supply. Charging CGST+SGST when you should charge IGST (or vice versa) results in an incorrect tax return and potential interest/penalties.
No HSN/SAC code. Even a 4-digit code is better than none. From FY 2021–22, HSN codes are mandatory on all B2B invoices regardless of turnover.
Duplicate invoice numbers. Using the same invoice number twice within a financial year creates reconciliation errors in GSTR-1 and can trigger scrutiny from the GST authorities.
Not showing reverse charge status. The field "Whether tax is payable on reverse charge" must be marked Yes or No on every invoice. Omitting it makes the invoice technically non-compliant.
Charging GST on exempt supplies. Some goods and services are exempt from GST (like unprocessed food, healthcare, education). If you mistakenly charge GST on an exempt supply, you are obligated to remit that GST to the government but your customer cannot claim ITC on it.
InvoiceGen lets you add GSTIN, HSN codes, and automatic CGST/SGST/IGST calculations — free, no signup required.
Create Free GST InvoiceIs a GST invoice mandatory even for small purchases?
For B2B supplies (business-to-business), a GST invoice is mandatory for every taxable supply regardless of value. For B2C supplies (to individual consumers), a simplified invoice or retail invoice can be issued for transactions below ₹200 if the recipient does not request a full tax invoice. For B2C supplies above ₹200, a full GST invoice is required.
Can I issue a handwritten GST invoice?
Yes, a handwritten GST invoice is legally valid provided it contains all 16 mandatory fields under Rule 46 of the CGST Rules. However, most businesses use printed or digitally generated invoices for accuracy and professionalism. If you are above the e-invoicing threshold (₹5 crore turnover), you must generate the invoice electronically via the IRP.
How long should I keep GST invoices?
Under Section 36 of the CGST Act, every registered person must retain accounts and records — including tax invoices — for 72 months (6 years) from the due date of filing the annual return for the relevant financial year. Keep both digital and physical copies securely.
What happens if I issue a wrong GST invoice?
You can correct errors using a Credit Note (to reduce the invoice value or correct an excess tax charge) or a Debit Note (to increase the invoice value). You cannot simply edit and reissue an invoice with the same number once it has been sent. For e-invoices, you must cancel the original IRN and generate a new one within 24 hours of generation.