What a Valid GST Invoice Must Contain

Why the fields matter to you and not just to your accountant

When your buyer claims input tax credit, they are asking the government to accept that tax was properly charged on a genuine supply. The invoice is the evidence. If it is incomplete, the claim is weak, and the person who suffers first is your customer.

What happens next is predictable. They come back and ask for a corrected invoice, which means a credit note and a fresh document, and a conversation you did not need. Get it right the first time and none of this happens.

The required fields

A tax invoice must carry the following.

Your name, address and GSTIN. The GSTIN is not optional if you are registered.
A consecutive serial number, unique within the financial year, no more than 16 characters, using only letters, numbers, hyphens and slashes.
Date of issue.
Your buyer's name, address and GSTIN, if they are registered.
For an unregistered buyer where the value exceeds ₹50,000, their name and address plus the delivery address.
HSN code for goods, or SAC for services.
Description of the goods or services, with quantity and unit for goods.
Total value, and the taxable value after any discount.
Rate and amount of tax, shown separately as CGST, SGST, IGST and cess as applicable, grouped by rate.
Place of supply, including the state name.
Whether tax is payable on reverse charge, and a signature or digital signature.

Eleven items. Most templates people download cover about seven of them.

The serial numbering rule

This is where otherwise careful businesses trip, because the rule is stricter than it sounds.

Consecutive. No gaps. If you generate INV-007 and then decide not to send it, you cannot skip to INV-009 and pretend 008 never existed. Cancel it properly and record the cancellation.
Unique within the financial year. Two invoices with the same number in one year is a real problem. Restarting your sequence in April is fine and normal, provided each year's series is internally consecutive.
Sixteen characters maximum, using only letters, numbers, hyphens and slashes. No spaces, no hash symbols, no other punctuation.
Never reuse a cancelled number.

A pattern like 26-27/001 rising by one, restarting each financial year, satisfies all of this and is easy to explain if anybody asks. What causes trouble is a spreadsheet where someone deletes a row.

Place of supply, which decides the tax heads

Within your state you charge CGST and SGST at half the rate each. Across states you charge IGST at the full rate. Same total, different heads, and the invoice must show the correct pair.

For goods, the place of supply is usually where they are delivered. For services to a registered business, it is usually the recipient's location. Several categories have specific rules, including transport, events, telecommunications and anything relating to immovable property.

The one that catches service businesses: your client's registered address decides it, not where you did the work. Sitting in Surat building software for a company registered in Bengaluru means IGST, even though nobody travelled.

HSN and SAC codes

HSN classifies goods, SAC classifies services. The number of digits you must quote depends on your turnover, with larger businesses required to be more specific.

Two pieces of practical advice. Look your code up on the GST portal rather than copying one from a competitor's invoice, because the wrong code can imply the wrong rate and the liability for that is yours. And once you have confirmed the right code for what you sell, save it somewhere and reuse it, so it stays consistent across every invoice and every return.

Discounts, and the sequence that matters

A discount shown on the face of the invoice reduces the taxable value, so tax is charged on the net amount. A discount agreed afterwards, off invoice, generally does not reduce the taxable value on which you already charged tax, and unwinding it later requires a credit note.

So if you intend to give a discount, put it on the invoice. The correct order on the document is: gross value, then discount, then taxable value, then tax on that taxable value. Showing tax first and a discount underneath produces a document that does not add up in the way the rules expect.

Timing

For services, the invoice must generally be issued within a prescribed period of the supply being completed. For goods, it is generally issued before or at the time of removal or delivery. Issuing invoices in a batch at month end for work finished three weeks earlier is a habit worth breaking, both for compliance and because your payment clock only starts when the invoice arrives.

Documents that are not tax invoices

Bill of supply. Used for exempt supplies, or by composition scheme taxpayers who cannot charge GST. It shows no tax.
Receipt voucher, issued when you take an advance payment.
Credit note, to reduce the value or tax on an invoice already issued.
Debit note, to increase it.
Delivery challan, for movement of goods where no supply is happening, such as goods sent for job work.

Using the wrong document type is a common error. If you are not registered, or the supply is exempt, you must not issue a tax invoice showing GST.

How many copies

For goods, three: original for the recipient, duplicate for the transporter, triplicate for you. For services, two: original for the recipient and duplicate for you. Each copy should be marked with what it is. In practice most businesses issue PDFs, but the marking convention still applies.

The five mistakes I see most

No place of supply. Extremely common and it is a required field.
Missing HSN or SAC code. Second most common.
Blended tax figure where the invoice has multiple rates. Tax must be grouped by rate.
Broken numbering, usually from a deleted spreadsheet row or a restarted sequence mid year.
No reverse charge statement. Even when the answer is nil, the invoice should say so.

Producing one that is right

The invoice generator includes all eleven fields, groups tax by rate, handles the CGST and SGST split against IGST, and prints to PDF cleanly. It will not tell you whether the rate or HSN code you entered is correct for what you sold, because only you and your accountant can determine that.

If you want to understand the arithmetic underneath, how GST is actually calculated covers adding, removing and splitting it. And a standing caveat: GST rules and rate classifications change, so confirm the current position before relying on any of this. It is general information, not advice.

Common questions

What happens if I miss a required field?

Your buyer's input tax credit claim becomes vulnerable, since the invoice is the evidence supporting it. In practice they will come back and ask for a corrected document, which means issuing a credit note and a fresh invoice. Getting it right first time avoids all of that.

Can I restart my invoice numbering each April?

Yes, and most businesses do. The requirement is that the number is unique within the financial year and the series is consecutive. Restarting at 001 each April is fine. What is not fine is gaps within a year, or reusing a cancelled number.

Do I need an HSN or SAC code on every invoice?

Yes, HSN for goods and SAC for services. How many digits you must quote depends on your turnover, with larger businesses required to be more specific. Look the code up on the GST portal rather than copying one from elsewhere, because an incorrect code can imply an incorrect rate and the liability is yours.

Should the discount come before or after tax on the invoice?

Before. Show gross value, then the discount, then the taxable value, then tax calculated on that taxable value. A discount shown on the invoice reduces the taxable value. One agreed afterwards generally does not, and unwinding it needs a credit note.

What if I am not registered for GST?

Then you must not issue a tax invoice showing GST, and you must not charge it. You issue a plain invoice or, for exempt supplies, a bill of supply. Charging GST without registration is a serious problem.

Does an invoice need a signature if I send it as a PDF?

A signature or digital signature of the supplier or an authorised representative is a required field. Many businesses add a scanned signature image or use a digital signature. A statement that the invoice is computer generated is common practice but does not by itself substitute for the requirement.

Written by Khanjan Kavani, who builds software in Surat and writes these to answer the questions clients keep asking. Found a mistake? Tell me at hello@khanjankavani.com and I will correct the article itself.

General information, not professional advice. Rules in India change. Check anything important against the current position or a qualified professional. See the disclaimer.

What a valid GST invoice must contain