India's invoicing rules are among the most prescriptive anywhere. A GST tax invoice is not a commercial document that happens to mention tax — it is a statutory document whose contents are set out in Rule 46 of the CGST Rules, and whose details feed directly into your customer's input tax credit claim.
That last point is what gives Indian clients such a low tolerance for errors. If your invoice has the wrong GSTIN, the wrong place of supply, or the wrong split between CGST/SGST and IGST, your customer cannot claim the credit. They will send it back, and payment waits.
This guide covers what a GST invoice must contain, the intra-state versus inter-state split that trips up most newcomers, when e-invoicing applies, and what changes if you are billing from outside India.
This is general information, not tax or legal advice. GST rules and rate slabs are revised periodically. Confirm anything affecting your business with the GST portal or a chartered accountant.
GSTIN: the number everything hangs on
A GSTIN is a 15-character identifier, and its structure is worth understanding because it tells you things you need:
- Characters 1–2 — the state code. This determines the place of supply, and therefore which taxes apply.
- Characters 3–12 — the PAN of the business.
- Character 13 — entity code, for multiple registrations against one PAN in the same state.
- Character 14 —
Zby default. - Character 15 — a checksum.
GST registration is state-wise, not national. A company operating in three states holds three GSTINs against the same PAN. Invoice the right one — billing a Karnataka GSTIN for a supply made to the client's Maharashtra office is a genuine error, not a technicality.
Registration is generally compulsory once aggregate turnover exceeds ₹40 lakh for goods or ₹20 lakh for services, with lower thresholds in special category states. Inter-state suppliers and e-commerce operators often must register regardless of turnover.
CGST + SGST, or IGST?
This is the single most common mistake, and it follows one rule: compare the place of supply with the supplier's location.
- Same state — the tax splits into CGST (central) and SGST (state), each at half the total rate. An 18% supply becomes 9% CGST + 9% SGST, shown as two separate lines.
- Different states — a single IGST line at the full rate. An 18% supply is one 18% IGST line.
- Union territories without a legislature use UTGST in place of SGST.
The total the customer pays is identical either way. What differs is how it is reported, and getting it wrong breaks their credit claim. If you charge IGST where CGST+SGST was due, the customer cannot simply reallocate it — the invoice has to be corrected.
For services, place of supply is generally the recipient's location where they are registered. For goods, it is generally where the movement of goods terminates for delivery.
What a tax invoice must contain
Rule 46 requires:
- Name, address and GSTIN of the supplier
- A consecutive serial number, unique for the financial year, not exceeding 16 characters — letters, numerals, hyphens and slashes only
- Date of issue
- Name, address and GSTIN or UIN of the recipient, where registered
- For unregistered recipients where the value exceeds ₹50,000: name, address, delivery address and state with its code
- HSN code for goods, or SAC code for services
- Description, quantity and unit
- Total value, and taxable value after any discount
- Rate and amount of tax, split into CGST, SGST/UTGST, IGST and cess as applicable
- Place of supply with the state name, for inter-state supplies
- Delivery address, where it differs from the place of supply
- Whether tax is payable on reverse charge
- Signature or digital signature of the supplier or an authorised representative
Two details deserve emphasis. The 16-character limit on the invoice number is real and catches out businesses migrating from systems with longer references. And the series must be unique per financial year — India's financial year runs April to March, so numbering resets at the start of April, not January.
HSN and SAC codes
Every line needs a classification code: HSN (Harmonised System of Nomenclature) for goods, SAC (Services Accounting Code) for services.
The number of digits required scales with turnover. Smaller businesses report fewer digits; larger businesses report more, and this has tightened over time. Check the requirement for your turnover band rather than assuming — reporting too few digits is a compliance failure even when the code itself is correct.
For services, common SAC codes sit in the 99xxxx range: software development, design, consulting and similar professional services each have their own.
Rate slabs
GST has historically used a multi-slab structure of 0%, 5%, 12%, 18% and 28%, plus cess on selected goods. A significant rationalisation in September 2025 consolidated this toward two principal rates — 5% and 18% — with a higher rate reserved for luxury and demerit goods, and the 12% and 28% slabs largely absorbed into the two main rates.
Because rate changes are frequent and item-specific, confirm the current rate for your particular HSN or SAC code on the GST portal rather than relying on any general summary, including this one. Most professional and IT services fall at 18%.
Bill of supply, not tax invoice
You issue a bill of supply rather than a tax invoice when:
- you are registered under the composition scheme, or
- you are supplying exempt goods or services
A bill of supply carries no tax amount, and a composition dealer must state that they are not eligible to collect tax on supplies. Issuing a tax invoice when you are a composition dealer is a substantive error.
e-Invoicing through the IRP
India's e-invoicing system does not mean emailing a PDF. A covered business must upload invoice data to an Invoice Registration Portal (IRP), which returns an Invoice Reference Number (IRN) and a signed QR code. Only then is the invoice legally valid — an invoice without a valid IRN, where e-invoicing applies, is treated as not issued at all.
The obligation has been extended downward in stages by turnover, from very large businesses initially to a threshold of ₹5 crore in aggregate annual turnover. The threshold has moved repeatedly, so check whether your turnover band is currently covered.
There is also a reporting time limit: businesses above a specified turnover must report invoices to the IRP within a set number of days of the invoice date, after which the portal will not accept them.
Exporting services from India
Exports are treated as zero-rated supplies, and you have two routes:
- Supply under a Letter of Undertaking (LUT) without paying IGST, then claim a refund of the input tax credit; or
- Pay IGST on the export and claim a refund of the tax paid
Most service exporters use the LUT route, which is filed annually. An export invoice must carry an endorsement stating that it is a supply meant for export, and whether it is made with or without payment of integrated tax.
Note that qualifying as an "export of service" has conditions beyond simply having a foreign client — including that payment is received in convertible foreign exchange, and that the supplier and recipient are not merely establishments of the same person.
If you are outside India invoicing an Indian client
You generally do not register for GST or issue a GST tax invoice. Send a normal commercial invoice. Your Indian client will usually account for GST themselves under reverse charge on the imported service.
Separately, your client may be required to deduct TDS (tax deducted at source) under the Income Tax Act on the payment. The rate depends on the nature of the payment and on whether India has a double tax treaty with your country. Claiming a reduced treaty rate typically requires a Tax Residency Certificate from your own tax authority, plus Form 10F. Agree this before invoicing, because recovering over-deducted tax means filing an Indian return.
Checklist
- Your GSTIN, and the correct state registration of your client
- Serial number unique for the financial year, 16 characters or fewer
- HSN code for goods, SAC code for services, at the right number of digits
- CGST + SGST for intra-state, IGST for inter-state — verified against place of supply
- Place of supply with state name on inter-state supplies
- Reverse charge flagged where it applies
- IRN and QR code, if e-invoicing covers your turnover band
- LUT endorsement, if exporting without payment of IGST
- Signature or digital signature
FAQ
What is the difference between CGST/SGST and IGST?
It depends on whether the supply crosses a state boundary. Within one state the tax splits into CGST and SGST at half the rate each; across states it is a single IGST line at the full rate. The customer pays the same total, but the wrong split blocks their input tax credit.
Is there a character limit on the invoice number?
Yes — 16 characters, using only letters, numerals, hyphens and slashes. The series must be consecutive and unique within the financial year, which in India runs April to March.
Do I need to issue an e-invoice?
Only if your aggregate annual turnover exceeds the current threshold, which has been progressively lowered to ₹5 crore. Where it applies, an invoice without a valid IRN from the Invoice Registration Portal is not a legally issued invoice. Check your turnover band on the GST portal, since the threshold has changed several times.
What is a bill of supply?
The document issued instead of a tax invoice when you are registered under the composition scheme or supplying exempt goods and services. It carries no tax amount, and composition dealers must state that they cannot collect tax on supplies.
I am a freelancer outside India with an Indian client. Do I need GST registration?
Generally no. Send a standard commercial invoice; your client normally accounts for GST under reverse charge. Be aware they may also deduct TDS from the payment, and that claiming a reduced treaty rate usually requires a Tax Residency Certificate and Form 10F.
What GST rate applies to services?
Most professional, consulting and IT services are taxed at 18%. Because rates are revised — notably in the September 2025 rationalisation toward principally 5% and 18% — confirm the current rate for your specific SAC code on the GST portal rather than relying on a general figure.