What is a GST invoice?
A GST invoice, formally a tax invoice, is the bill a GST-registered business issues when it sells taxable goods or services. It records what was sold, for how much, and how much GST was charged.
It matters to both sides. The seller reports it in GSTR-1, and the buyer can claim input tax credit only on a valid tax invoice that appears in their GSTR-2B.
Not every bill is a tax invoice. Exempt supplies and sales by composition taxpayers use a bill of supply, which carries no GST.
Mandatory details on a GST invoice (Rule 46)
- Supplier's name, address and GSTIN
- A serial number of up to 16 characters, unique for the financial year (letters, numbers, "-" and "/" allowed)
- Date of issue
- Recipient's name, address and GSTIN, if registered
- For an unregistered buyer, where the value is ₹50,000 or more: name, address, delivery address and state
- HSN code for goods or SAC code for services
- Description, quantity and unit
- Total value, and taxable value after any discount
- Tax rate and amount, shown separately as CGST, SGST/UTGST, IGST and cess
- Place of supply with the state name, for inter-state sales
- Delivery address, if different from the place of supply
- Whether tax is payable under reverse charge
- Signature or digital signature of the supplier or an authorised person
How many HSN digits?
| Aggregate turnover (previous year) | HSN digits on invoices |
|---|---|
| Up to ₹5 crore | 4 digits on B2B invoices (optional on B2C) |
| Above ₹5 crore | 6 digits on all invoices |
When must the invoice be issued?
- Goods: at or before removal of the goods, or delivery to the buyer.
- Services: within 30 days of supplying the service (45 days for banks and insurers).
- Continuous supplies: as per the payment or billing schedule agreed.
Copies: for goods, issue the original for the buyer, a duplicate for the transporter and a triplicate for yourself. For services, an original and a duplicate.
E-invoicing: when your invoice needs an IRN
- Businesses whose aggregate turnover has exceeded ₹5 crore in any year since 2017-18 must generate e-invoices for B2B sales, exports and some other documents. You upload the invoice to the Invoice Registration Portal and get back an IRN and a QR code.
- From 1 April 2025, businesses with turnover of ₹10 crore or more must report each e-invoice within 30 days of its date. The portal rejects anything later.
- B2C invoices of very large businesses (turnover above ₹500 crore) must carry a dynamic QR code.
An invoice that should have been an e-invoice but wasn't is not a valid invoice, and your buyer loses the credit.
Common GST invoice mistakes
- Charging CGST + SGST on an inter-state sale, or IGST on a local one. Check the state codes of both parties.
- Restarting the serial number mid-year, or using numbers longer than 16 characters.
- Copying the buyer's GSTIN wrongly. Verify it with a GST search first.
- A composition taxpayer issuing a tax invoice with GST on it.
Getting invoices and GSTR-1 to match every month is most of GST compliance. TaxQue's GST return filing and bookkeeping services take care of both.
