A tax invoice does two things at once: it records your sale, and it entitles your customer to input tax credit. The second job is the one with formal requirements attached, and it is why a buyer’s accounts team will reject an invoice over a missing field that seems trivial to the seller.
What it must carry
- Supplier name, address and GSTIN
- A consecutive serial number, unique for the financial year
- Date of issue
- Recipient name, address and GSTIN where they are registered
- Place of supply, and the State code — this decides IGST against CGST/SGST
- HSN or SAC code
- Description, quantity and unit
- Taxable value, rate and amount of tax shown separately for each rate
- Whether tax is payable on reverse charge
- Signature or digital signature
Two fields cause most rejections: place of supply, because getting it wrong makes the whole tax charge the wrong type, and tax shown separately, because a single inclusive total gives the buyer nothing to claim against.
HSN digits scale with turnover
| Aggregate turnover | HSN digits required |
|---|---|
| Up to ₹5 crore | 4 digits on B2B supplies |
| Above ₹5 crore | 6 digits |
Smaller businesses are also relieved from HSN on B2C supplies in some cases. What matters is that the code is right, not merely present — a wrong HSN can put you on the wrong rate, which is a far more expensive error than a missing digit.
Invoice or bill of supply
A tax invoice is issued when you charge GST. A bill of supply is issued when you cannot — because the supply is exempt, or because you are on the composition scheme, where it must carry the prescribed declaration that you are not eligible to collect tax.
Issuing a tax invoice when you were not entitled to collect is a serious error, because you have charged a tax you must now account for while your customer claims a credit they may not be entitled to.
When it must be issued
- Goods: on or before removal or delivery.
- Services: within the prescribed period from supply — do not let a month’s billing drift into the next.
- Continuous supply: by the due date stated in the contract, or on receipt of payment.
Late invoicing is not only a compliance point. Your customer cannot claim what you have not reported, and there is an outer limit on how late a credit can be taken at all — the discipline behind our monthly close checklist and the invoice management system.
Where we come in
We review invoice formats at onboarding — the fields, the HSN mapping and the place-of-supply logic — because a defective template quietly damages every customer relationship it touches. See GST services.
This article is general information, not professional advice. Limits, rates and dates change by notification — confirm the position for your own year before acting on it.
