A GST tax invoice is valid only when it carries the details the law asks for. If a mandatory field is missing or wrong, your customer may struggle to claim input tax credit, and you may face questions during a return review. This guide explains the fields that go on a GST invoice, when to issue it, and the mistakes that cause the most rework.
Who must issue a tax invoice, and who issues a bill of supply
A registered person supplying taxable goods or services issues a tax invoice. Rule 46 of the CGST Rules lists what it must contain. A taxpayer under the composition scheme, or a supplier of wholly exempt goods or services, issues a bill of supply instead and does not charge GST. A composition dealer's bill of supply should also carry the words "composition taxable person, not eligible to collect tax on supplies".
If you are unsure which document applies to a particular sale, confirm with your chartered accountant before you set up your invoice template.
The mandatory fields on a GST tax invoice
Rule 46 asks for the following, in broad terms. Check the current text of the rule on the official CBIC website for the full wording.
- Supplier details: name, address and GSTIN.
- Invoice number: a consecutive serial number, unique for the financial year, of not more than 16 characters, using letters, numbers, hyphen or slash.
- Date of issue.
- Recipient details: name, address and GSTIN if the buyer is registered. For an unregistered buyer, the address and the state name are needed in the cases the rule specifies.
- HSN code (goods) or SAC (services), a description, the quantity and unit for goods.
- Value: total value, any discount, and the taxable value.
- Tax: rate and amount of CGST, SGST/UTGST, IGST and cess, as applicable.
- Place of supply, with the state name, where the supply is inter-state.
- Reverse charge: whether tax is payable on reverse charge.
- Signature or digital signature of the supplier or authorised representative.
Getting the serial number right
The most common error is a broken or duplicate series. Pick a format once, such as INV/26-27/0001, and let it run in sequence through the financial year. Do not reuse a number, and do not skip numbers without a reason you can explain. If a draft invoice is cancelled, keep a record of the cancellation so that gaps in the series can be explained.
If you issue invoices from more than one branch or place of business, you may need a separate series for each GSTIN. Keep that in mind when you set up numbering.
Print the series prefix and the financial year on every copy, and store invoices in a way that lets you find any number within minutes during a query or audit.
HSN and SAC codes: what to put and how many digits
Every line item needs a classification code. HSN applies to goods and SAC to services. The number of digits you must show depends on your turnover; as a general rule, smaller taxpayers need fewer digits and larger ones need more. Check the latest CBIC notification on HSN digits for your turnover band before you finalise your template.
Pick the code that describes the item, not the one that gives the lowest rate. A wrong code leads to a wrong rate, and a wrong rate flows into your GSTR-1 and GSTR-3B.
CGST/SGST or IGST: place of supply decides
Within one state, a normal supply attracts CGST and SGST. Between states, it attracts IGST. The deciding factor is the place of supply, not just where your office or the customer's office happens to be. For goods this is usually where delivery ends; for services the rules are more detailed. If the split is wrong, your return and your customer's credit both carry the error, and correcting it later needs amendments.
When to issue the invoice
For goods, the invoice is issued before or at the time of removal or delivery. For services, Rule 47 gives a window of 30 days from the date of supply (45 days for certain banking and financial institutions). Issuing late is not a minor point, since the date of the invoice and the time of supply drive which month's return the sale appears in.
A quick pre-issue checklist
- Is the buyer's GSTIN correct and in the right state?
- Is the invoice number next in series and unique?
- Does each line carry the right HSN/SAC and the right rate?
- Is CGST/SGST versus IGST consistent with the place of supply?
- Is the reverse-charge field filled correctly?
- Does the taxable value add up after discounts?
How invoice errors reach your returns
What you put on the invoice is what you report in GSTR-1, and your customers' credit depends on it, as explained in our guide to GST input tax credit for small businesses. Tax payable then flows into your GSTR-3B. Clean invoices at the start save time at every later step.
Key takeaways
- Registered suppliers issue a tax invoice; composition and exempt suppliers issue a bill of supply.
- Rule 46 sets the mandatory fields, including GSTIN, a unique serial number up to 16 characters, HSN/SAC and place of supply.
- Place of supply decides CGST/SGST versus IGST.
- Services invoices generally need to be issued within 30 days of supply.
- Errors on an invoice carry into GSTR-1, GSTR-3B and your customer's credit.
Use a fixed template and a short review step before every invoice goes out. This is general guidance, not advice for your specific case, so confirm particular situations with your chartered accountant.
