Every GST-registered business in India must issue a proper tax invoice for every supply of goods or services above ₹200. Non-compliance attracts penalties. Here's what every invoice must contain and how to create one correctly.
Mandatory Fields in a GST Tax Invoice
| Field | Requirement |
|---|---|
| Invoice number | Sequential, unique per financial year |
| Invoice date | Date of supply |
| Supplier GSTIN | Your GST registration number |
| Supplier name and address | As per GST registration |
| Recipient details | Name, address, GSTIN (if registered) |
| HSN/SAC code | For goods (HSN) or services (SAC) |
| Item description, quantity, rate | Clear and specific |
| Taxable value | Before tax |
| CGST/SGST or IGST rate and amount | Correctly split |
| Total invoice value | Inclusive of GST |
Tax Invoice vs Proforma Invoice
- Tax Invoice: Issued after actual supply. Used for GST credit claim. Legally required for GST purposes.
- Proforma Invoice: Issued before supply as a quote. Not valid for GST credit. Used to confirm order details.
- Delivery Challan: For goods sent on approval or job work where invoice will follow later.
E-Invoicing Requirement
Businesses with annual turnover above ₹5 crore must generate invoices through the IRP (Invoice Registration Portal) at einvoice1.gst.gov.in. The portal generates an IRN (Invoice Reference Number) and QR code that must appear on the invoice. Invoices without IRN are invalid for recipients claiming ITC.
Freelancers: If you're under the ₹20 lakh GST threshold, you don't need to charge GST. But you should still issue proper invoices showing your services, amount, and that "GST not applicable" with your PAN number. Many clients require this for their accounting.
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