GST glossary
Tax invoice
A tax invoice is the bill a GST-registered business issues for a taxable sale of goods or services. It shows the GSTIN of the seller and buyer, the HSN or SAC code, the taxable value and the GST charged, and it is the document on which the buyer claims input tax credit.
Why it matters to your business
The tax invoice is where your sale, your GST and your customer’s input tax credit all begin. If a field is missing or the tax is wrong, your customer’s credit can be refused, your GSTR-1 will not match their GSTR-2B, and the payment you are waiting for is delayed while the invoice is corrected.
How it works
As of October 2026:
- You issue a tax invoice for every taxable supply. For exempt goods, or if you are under the composition scheme, you issue a bill of supply instead.
- Rule 46 of the CGST Rules lists what it must show. The invoice number must be unique within the financial year, in one or more series, and no longer than 16 characters.
- A sale within your state carries CGST and SGST. A sale to another state carries IGST. The place of supply decides which.
- For goods, the invoice is made in three copies: for the buyer, the transporter and yourself. For services, two.
- If your turnover has crossed ₹5 crore in any year since 2017-18, each B2B invoice must also be registered as an e-invoice to get its IRN.
- A mistake in an issued invoice is corrected with a credit note or a debit note, never by overwriting the invoice.
An example
A Pune electrical trader sells switches worth ₹10,000 to a contractor in Nashik. Both are in Maharashtra, so the invoice shows 9% CGST (₹900) and 9% SGST (₹900), a total of ₹11,800. The same goods sold to a contractor in Indore would show 18% IGST (₹1,800), with “Madhya Pradesh” as the place of supply.
Common mistakes
- Reusing or skipping invoice numbers, or restarting the series in the middle of the year.
- Leaving out the buyer’s GSTIN, so the buyer cannot claim the credit.
- Charging CGST and SGST on a sale to another state.
- Issuing the invoice days after the goods have left.
Questions about Tax invoice
What must a GST tax invoice contain?
The seller's name, address and GSTIN, a unique invoice number of up to 16 characters, the date, the buyer's name, address and GSTIN if registered, the HSN or SAC code, description, quantity and unit, the taxable value, the rate and amount of CGST, SGST or IGST, the place of supply for an inter-state sale, and the signature.
When must a tax invoice be issued?
For goods, before or at the time the goods are removed for delivery. For services, within 30 days of providing the service.
How many digits of HSN code go on the invoice?
Four digits if your turnover in the previous year was up to ₹5 crore, and six digits if it was more. Businesses with turnover up to ₹5 crore may leave the HSN code off invoices to unregistered customers.
Is a proforma invoice a tax invoice?
No. A proforma invoice is an offer or an advance bill. It creates no GST liability and the buyer cannot claim input tax credit on it. Only the tax invoice does.
Updated .