How to Create a GST Invoice in India (2026 Guide)

What Is a GST Invoice?

A GST invoice (also called a tax invoice) is a legal document issued by a GST-registered business to its buyer for every taxable supply of goods or services. It is the primary record for claiming Input Tax Credit (ITC) and filing GSTR-1 returns.

Under Section 31 of the CGST Act, every registered person making a taxable supply must issue a tax invoice. Failure to do so can result in penalties and loss of ITC eligibility for your buyers.

Who Needs to Issue a GST Invoice?

• Any business registered under GST (mandatory above ₹20 lakh turnover; ₹10 lakh for special category states)
• Businesses under Composition Scheme — must issue a Bill of Supply instead (not a tax invoice)
• Exporters — must issue an export invoice with "SUPPLY MEANT FOR EXPORT UNDER BOND / LUT WITHOUT PAYMENT OF IGST" or with IGST
• Reverse Charge Mechanism (RCM) supplies — buyer issues a self-invoice

16 Mandatory Fields in a GST Invoice (Rule 46)

Under Rule 46 of the CGST Rules 2017, a tax invoice must contain the following fields:

1. Name, address, and GSTIN of the supplier
2. Consecutive serial number — unique, not exceeding 16 characters (alphanumeric/special characters allowed)
3. Date of issue
4. Name, address, and GSTIN of the recipient (if registered)
5. Name and address of delivery (if different from billing address)
6. HSN code for goods or SAC code for services (mandatory above ₹5 crore turnover; 2-digit for ₹5–50 crore; 4-digit for above)
7. Description of goods or services
8. Quantity and unit of measurement (for goods)
9. Total taxable value — after discount, before tax
10. Rate of tax — CGST, SGST, IGST (0%, 5%, 12%, 18%, 28%)
11. Amount of tax charged — separately for CGST, SGST/UTGST, and IGST
12. Place of supply — state name and code (determines intra/inter-state)
13. Address of delivery where different from place of supply
14. Whether the tax is payable on reverse charge basis
15. Signature or digital signature of the supplier or authorized representative
16. In case of export invoices — shipping bill details and port of export

CGST vs SGST vs IGST — Which Tax to Apply?

The type of GST depends on whether the supply is intra-state or inter-state:

• Intra-state supply (supplier and buyer in same state): Charge CGST + SGST, each at half the GST rate. E.g., 18% GST = 9% CGST + 9% SGST.
• Inter-state supply (different states, or any export): Charge IGST at the full GST rate. E.g., 18% GST = 18% IGST.
• Union Territories: CGST + UTGST instead of CGST + SGST.

The Place of Supply (POS) rule determines which category applies. For services, POS is typically the location of the recipient.

Step-by-Step: How to Create a GST Invoice

1. Enter supplier details — Your business name, full address, GSTIN, state, phone, and email.
2. Add invoice number and date — Use a sequential numbering system (e.g., ZAP/2026-27/001). Restart each financial year.
3. Enter client details — Name, address, GSTIN, and state of the buyer.
4. Determine Place of Supply — Usually the buyer's state. This decides CGST+SGST vs IGST.
5. Add line items — Description, HSN/SAC code, quantity, unit price, and GST rate.
6. Apply discounts (if any) — Discount reduces taxable value, not the tax amount.
7. Calculate taxes — The tool auto-splits CGST/SGST or applies IGST based on POS.
8. Add payment terms and bank details — Optional but professional.
9. Review and download — Verify all mandatory fields before issuing.

Common Mistakes to Avoid

• Wrong GSTIN format — A valid GSTIN is 15 characters: 2-digit state code + 10-character PAN + entity number + checksum.
• Applying wrong tax type — Using CGST+SGST for an inter-state supply (should be IGST) is a compliance error.
• Incorrect Place of Supply — Especially for services — always use the buyer's state, not supplier's.
• Missing HSN/SAC code — Mandatory above ₹5 crore. Add it to avoid GSTR-1 mismatches.
• Editing issued invoices — Never modify a sent invoice. Issue a credit note or debit note instead.
• Skipping invoice serial number — Must be consecutive and unique within a financial year.

Invoice Time Limits Under GST

• Services: Within 30 days from date of supply of service
• Goods: Before or at the time of removal/delivery
• Continuous supply of services: On or before each due date of payment
• Banks and NBFCs: Within 45 days from date of supply