What has to be on a GST invoice?
Nine things, and a missing one is what sends an invoice back. Your trading name, address and GSTIN. The buyer’s name and address, plus their GSTIN if they are registered — leave that off a B2B invoice and you have blocked their input credit, which is the single most common reason a customer asks for a reissue. An invoice number, unique within the financial year. The date of issue. A description of each item with its HSN code for goods or SAC for services. Quantity and rate per line. The taxable value. The tax split. And the place of supply, which is what decides whether that split is CGST plus SGST or IGST.
How do you decide between CGST plus SGST and IGST?
By where the supply goes, not by where you sit. If the place of supply is the same state as yours, the tax splits into CGST and SGST at half the total rate each — an 18% item becomes 9% CGST and 9% SGST. If the buyer is in a different state, it is IGST at the full 18%. There is no case where all three appear on one line. Getting this backwards is not a small error: the buyer cannot claim the credit, and fixing it means a credit note and a fresh invoice, so it is worth checking the state on the buyer GSTIN before sending.
How should you number invoices so an audit does not ask questions?
Sequential, unique within the financial year, and at most 16 characters using letters, digits, slashes and hyphens. A prefix carrying the year makes the sequence legible at a glance — 26-27/001 tells you more than 001 does. What causes trouble is gaps and repeats: a number that appears twice, or a jump from 044 to 046 with nothing in between, is the first thing an audit picks at. If you cancel an invoice, keep the number and mark it cancelled instead of reusing it. Sellers running both a shop counter and a marketplace often keep two series with different prefixes, which is fine as long as each is internally sequential.
What about HSN and SAC codes?
HSN classifies goods and SAC classifies services, and the number of HSN digits you must show rises with your turnover — smaller sellers show fewer, larger ones show more. Below the threshold it is not mandatory. Including it anyway costs nothing and saves a conversation, particularly with B2B buyers whose accountants expect it. For apparel the codes sit in chapters 61, 62 and 63 depending on whether the garment is knitted, woven or a made-up textile article, and the right code is the one that matches the item rather than the one that is convenient. Look yours up once and keep the list; it does not change often.
How do you send and store the invoice?
Download the PDF, or send it straight to the buyer on WhatsApp — which is how most Indian sellers actually deliver invoices, and is perfectly valid. What matters is that you keep your own copy. The obligation is record retention, not any particular delivery channel. Keep the PDFs somewhere that survives a lost phone: a folder in cloud storage named by financial year is enough, and it makes the annual return far less painful than reconstructing from WhatsApp history. Nothing on this page is uploaded — the invoice is assembled in your browser, so the buyer’s details and your GSTIN never leave the device.
What is the difference between a tax invoice and a bill of supply?
A tax invoice is what a registered seller issues on a taxable supply, and it shows the tax. A bill of supply is what you issue when there is no tax to show — you are under the composition scheme, or the goods are exempt. Issuing the wrong one causes real problems: a bill of supply for a taxable sale means the buyer has nothing to claim credit against, and a tax invoice from a composition dealer misstates a tax that was never collected. If you are registered and selling taxable goods, it is a tax invoice, and it must say those words.