Check before you rely on this. This explains how GST works in general terms and is not tax advice. Rates, turnover thresholds and filing requirements change, and they differ by the kind of business you run — confirm the current position on the GST portal or with your accountant before acting on it.
A GST invoice is not a receipt with tax added at the bottom. It is a legal document, and the law is specific about what it carries. Get a field wrong and your buyer may be unable to claim input tax credit on it — which is the fastest way to lose a business customer.
This walks through what must appear, what is optional, and what the numbers should look like when it is done properly.
What a tax invoice must contain
These are the fields a tax invoice is required to carry. Most billing software fills them for you, but it is worth knowing what you are looking at.
- Your name, address and GSTIN. The GSTIN is the 15-character registration number. Its first two digits are your state code.
- A consecutive invoice number. Unique within the financial year, and genuinely consecutive — gaps invite questions.
- The date of issue.
- The buyer's name, address and GSTIN, where the buyer is registered.
- The place of supply. This decides which taxes apply, so it is not a formality.
- HSN or SAC code per line. HSN for goods, SAC for services.
- Description, quantity and unit for each item.
- Taxable value per line, after any discount.
- Tax rate and amount, split by head — CGST and SGST, or IGST.
- Whether tax is payable on reverse charge.
- A signature, physical or digital.
The one decision that changes everything: place of supply
This is where most confusion lives. You do not choose whether to charge CGST plus SGST or IGST — the answer falls out of two facts:
- Your place of supply (normally your registered state).
- The buyer's location.
If those are the same state, the tax splits into two halves: CGST (central) and SGST (state). If they are different states, the whole amount is IGST (integrated) instead.
The total the customer pays is identical either way. Only the split differs — and it matters because the two halves go to different places.
A worked example
Say you sell two items and the applicable rate is 18%.
| Item | HSN | Qty | Rate | Taxable value |
|---|---|---|---|---|
| Arabica coffee beans, 1 kg | 0901 | 2 | 500.00 | 1,000.00 |
| Ceramic pour-over cone | 6912 | 1 | 400.00 | 400.00 |
Taxable value totals 1,400.00.
Buyer in the same state
| Head | Rate | Amount |
|---|---|---|
| CGST | 9% | 126.00 |
| SGST | 9% | 126.00 |
| Invoice total | 1,652.00 |
Buyer in another state
| Head | Rate | Amount |
|---|---|---|
| IGST | 18% | 252.00 |
| Invoice total | 1,652.00 |
Same total, different split. That is the entire mechanism.
Mistakes that cause real problems
- Missing or wrong HSN codes. The buyer's credit claim can be questioned over this.
- Non-consecutive numbering. Deleting a cancelled invoice instead of marking it cancelled leaves a gap.
- Charging IGST within your own state (or the reverse). Usually a place-of-supply field left wrong.
- Rounding each line instead of the total. Small, but it accumulates into a reconciliation headache.
- No GSTIN for a registered buyer. Without it they cannot claim credit at all.
Doing this without thinking about it
Every field above is mechanical. Set your GSTIN and place of supply once, store an HSN code against each product, and the split is decided by the buyer's state on every invoice after that — no decision to make and nothing to remember.
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