GST in India is now almost a decade old — but the number of businesses still getting their invoices wrong is staggering. Wrong tax splits, missing HSN codes, invoice numbers that do not follow sequence.

The reason is not laziness. It is that no one ever explained GST invoicing in plain language. Most guides either quote the official notification or oversimplify to the point of being useless.

This guide walks through every mandatory field, explains the logic behind each rule, and flags the exact mistakes that get businesses penalized during GST audits.

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Who must issue a GST tax invoice?

Any GST-registered business supplying goods or services to another GST-registered business (B2B) must issue a tax invoice. No exceptions.
For B2C supplies (to end consumers), a tax invoice is required only if the transaction value exceeds ₹200. Below ₹200, you can issue a consolidated daily summary.
Composition dealers cannot issue a tax invoice. They must issue a 'Bill of Supply' instead and cannot collect GST from their buyers.
Businesses under the reverse charge mechanism (RCM) must issue a self-invoice within 30 days of the supply.

Every mandatory field in a GST tax invoice

Name, address, and 15-digit GSTIN of the supplier: The GSTIN must match the state from which the supply originates.
Name, address, and GSTIN of the recipient (for B2B): For B2C above ₹2.5 lakh, the buyer's name and address are mandatory.
Consecutive invoice number (up to 16 characters): This must be unique within a financial year. Restart the series at the beginning of each financial year (April 1).
Date of issue: The date of supply — when goods are dispatched or services are completed.
HSN code for goods or SAC code for services: Up to ₹5 crore: 4-digit. Above ₹5 crore: 6-digit. For e-invoicing businesses: 8-digit.
Description of goods or services: Must be clear enough to identify the nature of supply.
Quantity and unit of measurement (for goods): Use standard units like KG, LTR, MTR, NOS, PCS.
Total value (before discount): The gross value of the supply before any discount is applied.
Taxable value (after discount): The value on which GST is calculated. This is what goes into your GSTR-1.
GST rate and tax amount, split by CGST/SGST or IGST: For intra-state supply, split equally between CGST and SGST. For inter-state, charge IGST only.
Place of supply: Mandatory, and it determines which tax type applies. Getting this wrong leads to wrong tax type.
Whether GST is paid on a reverse charge basis: Add a line that says 'Reverse Charge: Applicable / Not Applicable.'
Signature or digital signature: The invoice must be signed. For e-invoices, the QR code and IRN serve as authentication.

IGST vs CGST vs SGST — the one rule that clears all confusion

The single rule: if the supplier's state and the place of supply are the same, use CGST + SGST. If they are different, use IGST.
Example 1 — Intra-state: A Bangalore-based agency invoices a Bangalore client for design services. Same state (Karnataka). Use CGST 9% + SGST 9% = 18% total.
Example 2 — Inter-state: A Pune-based manufacturer sells goods to a Delhi distributor. Different states. Use IGST 18% only.
Example 3 — The common trap: A Mumbai business supplies to a client who gives a Delhi billing address but wants delivery in Mumbai. The place of supply for goods is the delivery location (Mumbai), not the billing address.
For services, the place of supply is usually the recipient's registration state. If the recipient is unregistered, the place of supply is the recipient's address.

GST invoicing for different business types

Freelancers and consultants: If your annual service income exceeds ₹20 lakh (₹10 lakh in special category states), GST registration is mandatory.
Retail and kirana shops: Most kiranas are under composition scheme or unregistered. If composition, issue a Bill of Supply (not a tax invoice).
Manufacturers and traders: Must issue tax invoices with HSN codes and correct tax rates. If you sell both goods and services, each line item can have a different HSN/SAC.
Exporters: Exports are zero-rated under GST. Issue an 'Export Invoice' with 'Supply meant for export under bond/LUT' written on it.
E-commerce sellers: If you sell on Amazon, Flipkart, or Meesho, the marketplace typically deducts TCS (Tax Collected at Source) from your payments.

Who must issue a GST tax invoice?

Any GST-registered business supplying goods or services to another GST-registered business (B2B) must issue a tax invoice. No exceptions.

For B2C supplies (to end consumers), a tax invoice is required only if the transaction value exceeds ₹200. Below ₹200, you can issue a consolidated daily summary.

Composition dealers cannot issue a tax invoice. They must issue a 'Bill of Supply' instead and cannot collect GST from their buyers.

Businesses under the reverse charge mechanism (RCM) must issue a self-invoice within 30 days of the supply.

Every mandatory field in a GST tax invoice

Name, address, and 15-digit GSTIN of the supplier: The GSTIN must match the state from which the supply originates.

Name, address, and GSTIN of the recipient (for B2B): For B2C above ₹2.5 lakh, the buyer's name and address are mandatory.

Consecutive invoice number (up to 16 characters): This must be unique within a financial year. Restart the series at the beginning of each financial year (April 1).

Date of issue: The date of supply — when goods are dispatched or services are completed.

HSN code for goods or SAC code for services: Up to ₹5 crore: 4-digit. Above ₹5 crore: 6-digit. For e-invoicing businesses: 8-digit.

Description of goods or services: Must be clear enough to identify the nature of supply.

Quantity and unit of measurement (for goods): Use standard units like KG, LTR, MTR, NOS, PCS.

Total value (before discount): The gross value of the supply before any discount is applied.

Taxable value (after discount): The value on which GST is calculated. This is what goes into your GSTR-1.

GST rate and tax amount, split by CGST/SGST or IGST: For intra-state supply, split equally between CGST and SGST. For inter-state, charge IGST only.

Place of supply: Mandatory, and it determines which tax type applies. Getting this wrong leads to wrong tax type.

Whether GST is paid on a reverse charge basis: Add a line that says 'Reverse Charge: Applicable / Not Applicable.'

Signature or digital signature: The invoice must be signed. For e-invoices, the QR code and IRN serve as authentication.

IGST vs CGST vs SGST — the one rule that clears all confusion

The single rule: if the supplier's state and the place of supply are the same, use CGST + SGST. If they are different, use IGST.

Example 1 — Intra-state: A Bangalore-based agency invoices a Bangalore client for design services. Same state (Karnataka). Use CGST 9% + SGST 9% = 18% total.

Example 2 — Inter-state: A Pune-based manufacturer sells goods to a Delhi distributor. Different states. Use IGST 18% only.

Example 3 — The common trap: A Mumbai business supplies to a client who gives a Delhi billing address but wants delivery in Mumbai. The place of supply for goods is the delivery location (Mumbai), not the billing address.

For services, the place of supply is usually the recipient's registration state. If the recipient is unregistered, the place of supply is the recipient's address.

GST invoicing for different business types

Freelancers and consultants: If your annual service income exceeds ₹20 lakh (₹10 lakh in special category states), GST registration is mandatory.

Retail and kirana shops: Most kiranas are under composition scheme or unregistered. If composition, issue a Bill of Supply (not a tax invoice).

Manufacturers and traders: Must issue tax invoices with HSN codes and correct tax rates. If you sell both goods and services, each line item can have a different HSN/SAC.

Exporters: Exports are zero-rated under GST. Issue an 'Export Invoice' with 'Supply meant for export under bond/LUT' written on it.

E-commerce sellers: If you sell on Amazon, Flipkart, or Meesho, the marketplace typically deducts TCS (Tax Collected at Source) from your payments.

GST tax invoice rules in India: every mandatory field explained

Stop fighting with invoice templates.

Who must issue a GST tax invoice?

Every mandatory field in a GST tax invoice

IGST vs CGST vs SGST — the one rule that clears all confusion

GST invoicing for different business types

Keep reading

HSN and SAC codes explained — a practical guide for Indian businesses

Place of Supply under GST: the rule that determines your tax type

GST tax invoice rules in India: every mandatory field explained

Stop fighting with invoice templates.

Who must issue a GST tax invoice?

Every mandatory field in a GST tax invoice

IGST vs CGST vs SGST — the one rule that clears all confusion

GST invoicing for different business types

Keep reading

HSN and SAC codes explained — a practical guide for Indian businesses

Place of Supply under GST: the rule that determines your tax type