How to Create
a GST Invoice in India
Mandatory fields under GST law, B2B vs B2C invoice rules, e-invoicing threshold and process, invoice numbering rules, time limits, debit and credit notes — the complete GST invoice guide for 2026.
What Is a GST Invoice?
A GST invoice (formally called a Tax Invoice under the CGST Act) is the primary document that establishes a supply transaction under India’s GST system. It is the document that allows the buyer (if GST-registered) to claim Input Tax Credit. It also triggers the supplier’s GST reporting obligation. Getting the invoice right is not just good practice — it is a legal requirement. An invoice with missing fields or incorrect information can deny your customer the right to claim ITC, damaging your business relationship and potentially making you liable for their tax losses.
Mandatory Fields in a GST Tax Invoice — Rule 46
Under Rule 46 of the CGST Rules 2017, a valid tax invoice must contain all the following fields:
| Field | Details Required | Consequence of Missing |
|---|---|---|
| Supplier Details | Name, Address, GSTIN | Invoice invalid; ITC not claimable |
| Invoice Number | Unique, max 16 characters, per financial year series | Non-compliance penalty; ITC disputed |
| Invoice Date | Date of issue | Time limit computation affected |
| Recipient Details (B2B) | Name, Address, GSTIN of buyer | ITC cannot be claimed without GSTIN |
| HSN / SAC Code | Goods: HSN code; Services: SAC code | Non-compliance; ITC at risk |
| Description | Nature of goods or services supplied | Invoice may be disputed |
| Quantity and Unit | For goods — quantity in measurable units | Incomplete invoice |
| Taxable Value | Value of supply before GST | GST computation affected |
| GST Rate and Amount | CGST/SGST or IGST rate and amount separately | ITC amount unclear |
| Total Invoice Value | Taxable value + GST = final amount | Buyer cannot verify payment |
| Reverse Charge Applicability | Whether tax payable under reverse charge | Compliance failure |
| Supplier Signature | Manual or digital signature | Invoice not legally valid |
HSN Code Requirements by Turnover
HSN (Harmonised System of Nomenclature) codes must be mentioned on invoices — the number of digits required depends on the supplier’s annual aggregate turnover:
| Annual Aggregate Turnover | HSN Digits Required |
|---|---|
| Up to Rs 5 crore | 4-digit HSN code |
| Above Rs 5 crore | 6-digit HSN code |
| All taxpayers (mandatory from 2021) | 4 or 6 digits as above (8-digit optional) |
For services, SAC (Service Accounting Code) is used instead of HSN — all SAC codes are 6 digits. The SAC code helps classify the service type and determine the applicable GST rate. Both HSN and SAC codes are available on the GST portal’s rate finder tool.
B2B vs B2C Invoice Requirements
| Parameter | B2B Invoice (Registered Buyer) | B2C Large (Unregistered, above Rs 2.5L) | B2C Small (Unregistered, below Rs 2.5L) |
|---|---|---|---|
| Buyer GSTIN | Mandatory | Not required (buyer unregistered) | Not required |
| Buyer Name, Address | Required | Required | Optional |
| State code of buyer | Required | Required | Optional |
| HSN/SAC | Required (4 or 6 digit) | Required | Required |
| GSTR-1 Reporting | Invoice-level in B2B section | Invoice-level in B2CL section | Consolidated in B2CS section |
| ITC available to buyer | Yes | No (unregistered buyer) | No (unregistered buyer) |
E-Invoicing — Mandatory for Rs 5 Crore+ Businesses
E-invoicing is a government mandate that requires businesses above Rs 5 crore annual turnover to generate all B2B invoices, debit notes, and credit notes through the Invoice Registration Portal (IRP). The process:
- Generate invoice in your accounting or billing software (Tally, Zoho, QuickBooks, or any ERP)
- Upload invoice JSON to the IRP at einvoice1.gst.gov.in (directly or via API integration)
- IRP validates the invoice, generates a unique IRN (Invoice Reference Number — 64-character hash), and a digitally signed QR code
- Send the e-invoice to your customer showing the QR code — they can verify it instantly
- The e-invoice data auto-populates your GSTR-1 — no separate data entry needed
E-invoicing does NOT apply to B2C invoices (sales to end consumers), exports (separate documentation), SEZ supplies, and a few specific sectors. Businesses approaching Rs 5 crore turnover should set up e-invoicing capability proactively to avoid last-minute compliance rush.
Invoice Numbering Best Practices
While GST allows flexible invoice numbering (any format up to 16 characters, reset annually), best practices ensure smooth compliance:
- Recommended format: INV/2526/0001 — FY prefix (2526 for FY 2025-26) + serial number
- Keep the series ascending even if not strictly sequential (gaps are allowed — but ascending order prevents confusion)
- Reset the series on April 1 each financial year
- Maintain separate invoice series if you have multiple branches or business types (e.g., goods vs services)
- Never reuse a cancelled invoice number — issue a Credit Note for cancellation instead
- For e-invoiced supplies: the IRP validates uniqueness automatically
Time Limits for GST Invoice Issuance
| Type of Supply | Invoice Issue Time Limit |
|---|---|
| Supply of goods (movement involved) | At or before removal of goods |
| Supply of goods (no movement) | At or before delivery / making available |
| Supply of services | Within 30 days of supply |
| Banking / financial institution services | Within 45 days of supply |
| Continuous supply of services | On/before due date of payment or receipt of payment |
| Reverse charge (self-invoice) | Date of payment to supplier or 60th day from supply date |
Debit Notes and Credit Notes
After issuing a tax invoice, you may need to revise it. GST provides two instruments:
Credit Note
Issued by supplier when: goods are returned by buyer; price is reduced after billing; tax was charged in excess; deficiency in service is discovered. A Credit Note reduces the supplier’s tax liability and the buyer must proportionately reverse the ITC claimed. Credit Notes must reference the original invoice number and date. There is no time limit for issuing a Credit Note — but the GST adjustment can only be claimed in GSTR-3B up to September 30 of the next financial year or annual return date, whichever is earlier.
Debit Note
Issued by supplier when: additional goods are supplied beyond the original invoice; price is increased after billing; tax was charged short. A Debit Note increases the supplier’s tax liability and the buyer gets additional ITC. Debit Notes must reference the original invoice. Both Debit and Credit Notes are reported in GSTR-1 under the respective section and reflected in GSTR-3B for the month of issue.
Common GST Invoice Mistakes to Avoid
- Missing or incorrect GSTIN of buyer — denies them ITC on the transaction
- Wrong HSN/SAC code — can result in wrong GST rate and non-compliance notice
- Not splitting CGST and SGST separately for intra-state supplies (showing only total GST)
- Charging CGST + SGST on inter-state supply — should be IGST only
- No invoice date — makes time-limit compliance unclear
- Invoice number exceeding 16 characters or containing invalid characters
- Not displaying whether reverse charge is applicable — creates compliance ambiguity
- For e-invoicing businesses: sending invoice to customer before getting IRN from IRP
GST Invoice Checklist
- All 13 mandatory fields under Rule 46 are present and accurate
- Correct tax type applied: CGST+SGST for intra-state; IGST for inter-state
- HSN/SAC code correct — verify on GST portal rate finder
- Buyer GSTIN verified before raising B2B invoice (use GST portal to verify GSTIN)
- Invoice number follows unique series and resets on April 1
- For businesses above Rs 5 crore turnover: all B2B invoices routed through IRP for e-invoicing
- Issue within time limit: at delivery for goods, within 30 days for services
- Use Credit Note (not cancelled invoice number) for cancellation or price revision
🧮 Free Calculators — Use Them Now
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Frequently Asked Questions
A valid GST invoice under Rule 46 of the CGST Rules must contain all of these mandatory fields: (1) Name, address, and GSTIN of the supplier; (2) Consecutive invoice number not exceeding 16 characters — unique for each financial year; (3) Date of issue of invoice; (4) Name, address, and GSTIN of the recipient if registered (for B2B transactions); for B2C transactions above Rs 2.5 lakh, recipient’s name, address, and state code are required; (5) HSN code (Harmonised System of Nomenclature) for goods or SAC (Service Accounting Code) for services; (6) Description of goods or services; (7) Quantity and unit of measurement for goods; (8) Total value of goods or services before GST; (9) Applicable GST rate (CGST, SGST, or IGST rate); (10) Amount of GST charged — broken into CGST, SGST, or IGST; (11) Total invoice value including GST; (12) Whether GST is payable on reverse charge basis; (13) Signature or digital signature of the supplier or authorised representative. Missing any mandatory field can make the recipient ineligible to claim ITC on that invoice.
A tax invoice is a formal document that creates a legal obligation — the buyer must pay the amount and is entitled to claim ITC. Tax invoices trigger GSTR-1 reporting obligations. A proforma invoice (or quotation) is a preliminary document sent before the supply is completed — it has no GST consequence, creates no tax liability, and cannot be used to claim ITC. Proforma invoices are useful for quotation, advance payment requests, and import/export customs clearance before the actual supply. Once the supply is completed and goods are dispatched or services rendered, a valid GST tax invoice replaces the proforma invoice. Never use proforma invoice numbers in your GST returns — only tax invoice numbers belong in GSTR-1.
E-invoicing (electronic invoicing) is a system where GST invoices are generated through the government’s Invoice Registration Portal (IRP) at einvoice1.gst.gov.in. The IRP validates the invoice and generates an IRN (Invoice Reference Number) and a QR code that must be displayed on the invoice. E-invoicing is now mandatory for businesses with aggregate annual turnover above Rs 5 crore in any preceding financial year. The threshold has been progressively reduced — it started at Rs 500 crore in October 2020 and was brought down to Rs 5 crore. Businesses below Rs 5 crore can generate invoices manually. E-invoices auto-populate GSTR-1, reducing data entry errors significantly.
GST invoice numbering must follow these rules: each invoice must have a unique serial number not exceeding 16 characters; the numbering series resets at the start of each financial year (April 1); the number can be purely numeric (001, 002, 003), alphanumeric (INV2526/001, GST/2025-26/001), or contain special characters like / and – but must be unique within the financial year; once a number is used, it cannot be reused even if the invoice is cancelled; for cancelled invoices, issue a Credit Note rather than reusing the cancelled invoice number; and the series must be ascending (or at least unique) — but does not need to be strictly sequential with no gaps. Best practice: use a format like INV/2526/0001 for easy tracking and filing reference.
GST invoice must be issued within specific time limits depending on the nature of supply: for supply of goods, invoice must be issued at or before the time of removal of goods (for physical delivery) or delivery to the recipient; for supply of services, invoice must be issued within 30 days from the date of supply of service; for banking and financial institutions providing services, within 45 days from supply; for continuous supply of services (like telecom, internet, subscription), invoice must be issued on or before the due date for payment or actual receipt of payment, whichever comes first; for reverse charge, the recipient must issue a self-invoice on the date of payment to the supplier or the 60th day from the date of supply, whichever comes first. Delayed invoicing can result in penalties of Rs 10,000 or 10% of tax, whichever is higher.
A Debit Note is issued by a supplier to increase the value of an original invoice — for example, when additional goods are delivered or the price is revised upward after the original invoice. A Debit Note increases the tax liability of the supplier and additional ITC becomes available to the recipient. A Credit Note is issued by a supplier to reduce the value of an original invoice — for example, when goods are returned, a discount is given after billing, or the price is reduced. The Credit Note reduces the supplier’s tax liability and the recipient must reverse proportionate ITC. Both must reference the original invoice number and date. Debit notes and credit notes are reported in GSTR-1 and reflected in GSTR-3B for the month in which they are issued.