If you're running a business in India, GST is just... part of life now. Since 2017, it's simplified a lot of indirect tax headaches, but it also means one thing: your invoice has to be right. One wrong field and your client loses their ITC claim. That's not a conversation you want to have.
I've spent enough time dealing with accountants to know what actually matters. Let's break it down without the jargon.
Tax Invoice or Bill of Supply?
Quick rule: If you're GST registered and selling taxable stuff to another registered business, you issue a Tax Invoice.
But if you're on the Composition Scheme or selling exempted goods (like fresh vegetables), you issue a Bill of Supply instead. No tax collection there.
The Mandatory Fields (Checklist)
According to GST Rule 46, a tax invoice must contain specific details to be valid. Missing even one can render the invoice invalid for ITC claims.
Header Details
- Your Legal Name & Address
- Your GSTIN (15-digit ID)
- Consecutive Serial Number (unique)
- Date of Issue
Recipient Details
- Recipient Name & Address
- Recipient GSTIN (if registered)
- Place of Supply (State Code)
Understanding Tax Types: IGST, CGST, SGST
This is where most mistakes happen. The tax you charge depends entirely on the location of your customer relative to you.
- Intra-StateIf you and the buyer are in the same state (e.g., Maharashtra to Maharashtra), you split the tax: 50% CGST (Central) + 50% SGST (State).
- Inter-StateIf the buyer is in a different state (e.g., Delhi to Karnataka), you charge a single tax component: IGST (Integrated GST).
You must mention the Harmonized System of Nomenclature (HSN) code for goods or Service Accounting Code (SAC) for services. For businesses with turnover > ₹5 Cr, a 6-digit code is mandatory.
The Bottom Line
GST invoicing looks complicated until you've done it a few times. Get a template that handles the IGST vs CGST/SGST logic automatically, and it becomes second nature.
Try our GST Invoice Template - it ensures you never miss a mandatory field, and the tax math is done for you. Also check out templates for tax consultants and travel agencies.