Who issues a tax invoice, and when
Section 31 of the CGST Act requires a registered person supplying taxable goods or services to issue a tax invoice. A business registered under the composition scheme, or one supplying only exempt goods or services, issues a bill of supply instead, which carries no tax.
- Goods: before or at the time of removal of goods for supply, where the supply involves movement. Where it does not, before or at the time of delivery or making the goods available to the buyer.
- Services: within 30 days of the date of supply of the service (Rule 47). Insurers, banking companies and financial institutions including NBFCs get 45 days.
- Goods sent on approval for sale or return: before or at the time of supply, or six months from the date of removal, whichever is earlier (Section 31(7)).
- Continuous supply of goods: before or at the time each statement of account is issued or each payment is received.
When goods leave before an invoice can be raised, for example for job work or on approval, they travel on a delivery challan instead. See delivery challans under GST for the cases that allow this.
The mandatory fields under Rule 46
Rule 46 lists the particulars a tax invoice must contain. The table below follows the order of the rule.
| Clause | What the invoice must show | Notes |
|---|---|---|
| (a) | Supplier's name, address and GSTIN | Every invoice |
| (b) | Consecutive serial number | Up to 16 characters, letters, numerals, hyphen (-) and slash (/) only, in one or more series, unique for the financial year |
| (c) | Date of issue | Every invoice |
| (d) | Recipient's name, address and GSTIN or UIN | If the recipient is registered |
| (e), (f) | Unregistered recipient's name, address, delivery address, and State name and code | Mandatory where the taxable value is ₹50,000 or more. Below that, only if the recipient asks for it |
| (g) | HSN code for goods or SAC for services | Number of digits depends on turnover (see below) |
| (h) | Description of goods or services | Every invoice |
| (i) | Quantity and unit (UQC) | For goods |
| (j) | Total value of supply | Every invoice |
| (k) | Taxable value after discount or abatement | Every invoice |
| (l) | Rate of tax: CGST, SGST or UTGST, IGST, cess | Show each tax that applies |
| (m) | Amount of each tax charged | Show each tax that applies |
| (n) | Place of supply with the State name | For inter-State supplies |
| (o) | Delivery address | Where it differs from the place of supply |
| (p) | Whether tax is payable on reverse charge | Every invoice |
| (q) | Signature or digital signature of the supplier or an authorised representative | Not required on an electronic invoice issued under the Information Technology Act, 2000 |
| (r) | QR code with the Invoice Reference Number (IRN) | Only for invoices issued under the e-invoicing rule, Rule 48(4) |
| (s) | Declaration that e-invoicing does not apply | Only for taxpayers above the notified e-invoicing turnover who are exempt from it |
Clause (l) and (m) are where most errors happen. An intra-State invoice shows CGST and SGST (or UTGST) as separate lines, and an inter-State invoice shows IGST. Never both on the same supply. Which one applies depends on the place of supply, explained in CGST, SGST and IGST: which one applies.
How many HSN digits to show
The first proviso to Rule 46 lets the CBIC notify how many digits of the HSN code a class of taxpayers must show. Notification 78/2020-Central Tax sets this by aggregate turnover in the preceding financial year, effective 1 April 2021.
| Aggregate turnover in the preceding financial year | HSN digits required |
|---|---|
| Up to ₹5 crore | 4 digits. May be left out on invoices to unregistered persons |
| More than ₹5 crore | 6 digits on all tax invoices |
The rule also allows the Board to require a set number of digits for a specific class of goods or services from every taxpayer, regardless of turnover, so check the notification for your products as well.
Copies of the invoice
Rule 48 sets how many copies to prepare and how to mark them:
- Goods, in triplicate: ORIGINAL FOR RECIPIENT, DUPLICATE FOR TRANSPORTER and TRIPLICATE FOR SUPPLIER.
- Services, in duplicate: ORIGINAL FOR RECIPIENT and DUPLICATE FOR SUPPLIER.
These copy rules do not apply to an e-invoice prepared under Rule 48(4). The serial numbers of invoices issued in a tax period are also reported in GSTR-1, which is why gaps or repeats in the series show up during reconciliation.
Special cases
- Small retail sales: under Section 31(3)(b), an invoice need not be issued for a supply below ₹200 where the recipient is unregistered and does not ask for one. A consolidated tax invoice must then be issued at the close of each day for all such supplies.
- Exports and SEZ supplies: the invoice carries the endorsement "SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS", followed by either "ON PAYMENT OF INTEGRATED TAX" or "UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX". In place of clause (e) it shows the recipient's name and address, the delivery address and the country of destination.
- Online services to unregistered buyers: where a service is supplied through an e-commerce operator, or online information and database access services are supplied, to an unregistered recipient, the invoice must show the recipient's State whatever the value. That State is treated as the address on record.
- Composition and exempt supplies: a bill of supply replaces the tax invoice, as set out in Section 31(3)(c).
A practical checklist before you send an invoice
- Your GSTIN and the buyer's GSTIN are correct, and the buyer's legal name matches their registration.
- The serial number follows on from the last one in the series and has not been used this financial year.
- Every line has an HSN or SAC code with the right number of digits for your turnover.
- Taxable value is after discount, and the rate and amount of each tax are shown separately.
- CGST and SGST for an intra-State supply, or IGST with the place of supply named for an inter-State one.
- The delivery address is shown if it differs from the place of supply.
- Reverse charge is marked yes or no.
- The invoice is signed, or is an electronic invoice that does not need a signature.
To check the tax amounts on a line before you issue it, the GST calculator shows the CGST and SGST or IGST split for any rate.
- CGST Rules, Rule 46: Tax invoice (CBIC)
- CGST Rules, Rule 47: Time limit for issuing tax invoice (CBIC)
- CGST Rules, Rule 48: Manner of issuing invoice (CBIC)
- CGST Act, Section 31: Tax invoice (CBIC)
- Notification 78/2020-Central Tax: HSN digits on tax invoices (GST Council)
This guide explains the rules in general terms. It is not tax advice: check the current notifications or ask your CA before you rely on it for a filing.