If you run a business or freelance in India, an invoice is a legal document, not just a payment request. Under the Goods and Services Tax (GST) regime a tax invoice has to carry specific fields, and getting them wrong can create problems with input tax credit for your clients and with your own return filing.
This guide covers what a GST-compliant invoice must contain, when you need a tax invoice versus a bill of supply, how CGST, SGST and IGST work, and how to create a correct invoice in a couple of minutes with a free invoice generator.
What a GST invoice must contain
Rule 46 of the CGST Rules lists the mandatory fields on a tax invoice. In practice, a compliant invoice includes:
- Your business name, address and GSTIN (15-digit GST identification number)
- A consecutive invoice number, unique for the financial year, up to 16 characters
- Date of issue
- Client name, address and their GSTIN if they are registered; for an unregistered client, the delivery address and state name and code where the invoice value is ₹50,000 or more
- HSN code for goods or SAC code for services (the number of digits required depends on your turnover)
- Description, quantity, unit and total value of the goods or services
- Taxable value after any discount
- Rate and amount of tax, split into CGST, SGST/UTGST and IGST as applicable, plus cess if any
- Place of supply and the state name when the supply is inter-state
- Whether tax is payable on reverse charge
- Signature or digital signature of the supplier or an authorised person
Export invoices and supplies to an SEZ carry an extra endorsement, for example “Supply meant for export on payment of IGST” or “…under bond or Letter of Undertaking without payment of IGST”.
CGST, SGST and IGST: which tax applies
The split depends on where your customer is:
- Same state (intra-state supply): charge CGST + SGST, each half of the total GST rate. An 18% supply becomes 9% CGST + 9% SGST.
- Different state, or a foreign customer (inter-state supply): charge IGST at the full rate, for example 18%.
The place of supply rules decide the state, and they are not always the client’s billing address — for services they can depend on where the service is performed or where immovable property is located. When in doubt, record the client’s state clearly on every invoice.
Tax invoice vs bill of supply
You issue a tax invoice when you charge GST. You issue a bill of supply instead when you cannot charge GST — for example if you are a composition scheme dealer, or you supply exempt or nil-rated goods and services. A bill of supply looks similar but shows no tax breakdown.
If you are not registered for GST at all because your turnover is below the threshold, you are not issuing a GST invoice. A plain commercial invoice with your details, the client’s details, a number, date, description and total is enough. Many small freelancers start here.
When you need to register for GST
Registration becomes mandatory once your aggregate turnover crosses the threshold — broadly ₹40 lakh for a supplier of goods and ₹20 lakh for services, with lower limits (₹20 lakh and ₹10 lakh) for special category states. You also have to register regardless of turnover if you make inter-state taxable supplies of goods, sell through an e-commerce operator, or are liable under reverse charge. Thresholds change, so confirm the current limits for your state and activity before deciding.
E-invoicing and the IRN
Businesses above a notified turnover have to generate invoices through the government’s Invoice Registration Portal, which returns an Invoice Reference Number (IRN) and a signed QR code that must be printed on the invoice. The turnover limit has been lowered in stages and now applies from ₹5 crore of aggregate turnover. Below that limit, you issue normal invoices without an IRN.
Invoicing clients outside India
Export of services is treated as a zero-rated supply. You can either export under a Letter of Undertaking without charging IGST, or charge IGST and claim a refund. Either way, raise the invoice in the agreed currency, add the export endorsement, and keep the bank realisation documents (FIRC or FIRA) that prove you were paid in foreign exchange. This matters for IT freelancers and agencies billing clients in the US, UK, EU and the Gulf.
Create a GST invoice for free
You do not need paid software to produce a correct invoice. With Invoicey’s free invoice generator you can:
- Add your GSTIN, the client’s GSTIN and both addresses
- Enter line items with HSN or SAC codes, quantity and rate
- Apply a single GST rate that splits into CGST/SGST, or a full IGST rate for inter-state and export invoices
- Set the invoice number, issue date and due date
- Download a clean PDF and send it to the client
It works in the browser, there is no charge for creating and downloading invoices, and you can switch currency for overseas clients. When you are ready to save clients, reuse numbering, send payment reminders and track what is paid, the same tool grows with you.
For customs and international shipments, use the commercial invoice generator. To send a priced proposal before the work starts, use the free quote generator. If you also bill clients in the EU, the EU VAT invoice generator handles reverse-charge wording.
Invoicing tools to try next
These free Invoicey tools support the same workflow, from first invoice to repeat billing:
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