How GST works on an Indian invoice
India's Goods and Services Tax (GST) is split according to the supplier location and legally determined place of supply. For an intra-state supply, the applicable rate is divided between Central GST (CGST) and State GST (SGST), or UTGST in a union territory. An 18 percent rate would normally appear as 9 percent CGST plus 9 percent SGST. An inter-state supply normally carries Integrated GST (IGST) at the full applicable rate.
| Type of supply | Tax treatment | Example at 18 percent |
|---|---|---|
| Intra-state | CGST + SGST or UTGST | 9 percent + 9 percent |
| Inter-state | IGST | 18 percent IGST |
| Export | Zero-rated; permitted routes differ | Without IGST under bond/LUT, or with IGST and a refund claim where allowed |
| Import | Import and IGST rules apply | Determine through the customs and GST process |
A supplier needs a GSTIN to issue a GST tax invoice and collect GST. Registration thresholds vary by supply type and state, while compulsory-registration rules and exceptions apply to particular activities. Check the GST portal for the business rather than relying on one nationwide turnover figure.
What must a GST tax invoice include?
A GST tax invoice has a prescribed set of particulars. There is no single official template, but a compliant invoice for a taxable supply must contain the following. A free invoice generator can help draft the general party, line-item and total information, but it has no dedicated HSN/SAC, place-of-supply, CGST/SGST or IGST fields. Add and verify those particulars in an appropriate GST invoicing system before issuing:
- Supplier name, address and GSTIN
- The legal name, address and the supplier's 15-digit GST Identification Number (GSTIN).
- Consecutive invoice number
- A consecutive serial number, unique for the financial year and no longer than sixteen characters, using the characters permitted by the GST rules.
- Date of issue
- The date the tax invoice was issued.
- Recipient details
- The name, address and GSTIN of the buyer if they are registered. For unregistered buyers, the name and delivery address are shown above the prescribed value.
- HSN or SAC code
- The Harmonized System of Nomenclature (HSN) code for goods or the Services Accounting Code (SAC) for services, for each line item.
- Description, quantity and unit
- A description of the goods or services, with quantity and unit of measure for goods.
- Taxable value
- The value of the supply after any discount, on which GST is calculated.
- Tax rate and amount by head
- The rate and amount of tax shown separately as CGST, SGST/UTGST or IGST, and cess where it applies.
- Place of supply
- The place of supply and the state name and code, especially for inter-state supplies.
- Reverse charge note
- A statement of whether tax is payable on a reverse-charge basis, where that applies.
- Signature
- The signature or digital signature of the supplier or an authorized representative.
HSN/SAC codes and place of supply
HSN codes classify goods and SAC codes classify services. The classification, required digit count and invoice display rules depend on the supply and current notifications, including the supplier's turnover and whether the recipient is registered. Use the official classification rather than choosing a code from a general description alone.
The place of supply determines whether a supply is treated as intra-state or inter-state. Goods and services follow different rules, with further rules for specific transactions. A wrong place of supply can also produce the wrong tax head, so verify it before issuing.
Show the taxable value, applicable rate and tax amount by head as required. Where the recipient is registered, include its GSTIN.
E-invoicing and the bill of supply
E-invoicing currently applies to covered registered persons whose aggregate turnover exceeded Rs 5 crore in any financial year from 2017-18 onward. Entity and transaction exclusions apply. Covered invoice, credit-note and debit-note data is reported to an Invoice Registration Portal (IRP), which returns an Invoice Reference Number (IRN) and signed QR code. Taxpayers with aggregate annual turnover of Rs 10 crore or more must report covered documents within 30 days of the document date. Check current portal eligibility before issuing.
A composition dealer cannot collect GST from customers and issues a bill of supply instead of a tax invoice. A registered person also uses a bill of supply for exempt supplies. The document has its own prescribed fields and no collected-tax breakdown. Other GST documents include receipt vouchers and credit or debit notes.
Indian invoicing questions
What is the difference between CGST, SGST and IGST?
CGST and SGST apply together to an intra-state supply, where the supplier and the place of supply are in the same state; the rate is split into equal CGST and SGST halves. IGST applies to an inter-state supply, between different states or on imports and exports, and is charged at the full rate as a single tax. The total tax is the same; only the split and which government receives it differ.
What must a GST tax invoice in India include?
A GST tax invoice must show the supplier's name, address and GSTIN, a consecutive invoice number, the date, the recipient's details, the HSN or SAC code, a description with quantity, the taxable value, the tax rate and amount split into CGST and SGST or IGST, the place of supply, any reverse-charge note, and the supplier's signature.
What is an HSN or SAC code on an invoice?
HSN classifies goods and SAC classifies services. The applicable classification, digit count and display requirement depend on the supply and current GST notifications, including turnover and recipient type. Confirm the code and rate from an official source.
When is e-invoicing mandatory in India?
The current mandate generally covers eligible registered persons whose aggregate turnover exceeded Rs 5 crore in any financial year from 2017-18 onward, subject to entity and transaction exclusions. Covered documents are reported to an IRP for an IRN and signed QR code. Taxpayers at Rs 10 crore or more also face a 30-day reporting limit.
What is a bill of supply and who issues it?
A bill of supply is a document issued instead of a tax invoice when no GST is charged to the customer. Composition dealers, who pay tax at a flat rate and cannot collect it from buyers, issue a bill of supply, as do registered persons supplying exempt or nil-rated goods and services. It shows the same identifying details as an invoice but no tax breakdown.
Do I need a GSTIN to issue invoices in India?
You need a GSTIN to issue a GST tax invoice and collect GST. Registration thresholds vary by supply type and state, and compulsory-registration rules have specific exceptions. Check the current GST registration test for your activity.