What a GST tax invoice is
A GST tax invoice is the document that turns a sale into a legal, taxable receivable. It identifies the supplier and buyer by GSTIN, lists every item with its HSN code and taxable value, charges the correct GST — split as CGST plus SGST for an in-state buyer or a single IGST for an inter-state buyer — adds any other charges, rounds the total, and states it in words. It is the document your customer needs to claim input tax credit, the document your GST returns are built from, and the document that posts to your books as a sales voucher.
One idea makes everything else about invoicing click: the tax invoice is a financial event, not a stock event. The goods have usually already left your premises on a delivery challan; the invoice attaches commercial and tax value to that dispatch. That is why serious billing systems raise the invoice against the dispatch or order rather than as a free-floating document — a discipline we return to in the double-bill guard below. For the wider context of where the invoice sits in the sale-to-accounts flow, start with the pillar guide, What is GST billing software?.
The mandatory fields, one by one
Indian GST rules prescribe what a tax invoice must contain. In practice they group into five blocks. The table below is the working checklist an accounts team actually uses:
| Block | Fields | Why it matters |
|---|---|---|
| Identity | Supplier name, address, GSTIN; invoice number (consecutive series) and date | Establishes who billed and when; the number series is what returns and audits reconcile against |
| Buyer | Buyer name, address, GSTIN (B2B); place of supply; ship-to if different from bill-to | The buyer's GSTIN and the place of supply decide the CGST/SGST vs IGST split and the buyer's input credit |
| Lines | Description, HSN/SAC code, quantity, unit, rate, discount, taxable value | Each line is taxed on its taxable value at the rate its HSN carries |
| Tax | Rate and amount of CGST + SGST or IGST, per line and in summary | The tax must be shown split correctly — a wrong split means a mismatched return |
| Total | Other charges, round-off, invoice total, amount in words, signature | The final, dispute-proof figure — words and digits must agree |
Two practical notes. First, the invoice number series should be consecutive and unbroken within a financial year — gaps invite questions at assessment. Second, B2C retail sales below the prescribed threshold do not need the buyer's GSTIN — that is what makes quick POS counter billing possible — but every B2B invoice does, which is why bulk GSTIN import against your party master is worth doing once and well.
HSN codes on every line
Every goods line carries an HSN (Harmonised System of Nomenclature) code; every service line carries a SAC code. The code classifies the item and determines its GST rate — 5%, 12%, 18% or 28% for most goods. The number of HSN digits you must print depends on your turnover, and the mapping of item to HSN to rate is a one-time master-data job that pays back on every invoice thereafter.
Because getting that mapping right is a project of its own — including bulk import when you have hundreds or thousands of items — we cover it in a dedicated guide: HSN codes and GST rates — how to map every item correctly. For this guide, the rule is simple: the HSN and rate should come from the item master, never from the operator's memory at billing time.
CGST + SGST or IGST — how the split works
The GST on each line is decided by where the buyer is relative to you:
- Same state (intra-state): the rate splits in half — CGST to the centre, SGST to the state. An 18% item bills as 9% CGST + 9% SGST.
- Different state (inter-state): one IGST at the full rate. The same item bills as 18% IGST.
- Export: usually zero-rated — under LUT without tax, or with IGST paid and refunded. See Export invoices under GST.
The decision reads off the buyer's GSTIN (its first two digits are the state code) and the place of supply. This is exactly the kind of rule software should apply and a human should never have to remember: billing systems hold the rate against the item and the applicability against the party, so the operator picks the party and the split happens. Getting it wrong is not cosmetic — a CGST/SGST invoice that should have been IGST breaks the buyer's credit claim and shows up as a mismatch in reconciliation.
Charges, rounding and amount in words
Real invoices rarely end at the item lines. Three things stand between the last line and the final figure:
Other charges. Freight, packing, insurance and loading that you recover from the buyer are added as charge heads on the invoice, and GST applies to them as configured — typically at the rate of the underlying supply. Because treatment can vary with the contract, configure charge heads once with your CA's advice and let every invoice inherit them.
Rounding. The invoice total is rounded to the rupee, with the round-off shown as its own small plus or minus line.
Amount in words. The rounded total is spelled out in Indian numbering — lakh and crore, not million — for example "Rupees Two Lakh Thirty-Four Thousand Five Hundred Only." Words that are generated from the figure by the software can never disagree with it; words typed by hand can and do.
Invoice variants — export, credit note, cancelled
A billing system does not hold just one kind of invoice. Under the hood, each document is the same engine with a different code and behaviour:
| Document | Typical code | What it does |
|---|---|---|
| Domestic tax invoice | IN / NIN | The standard GST invoice described in this guide — CGST/SGST or IGST applied in full |
| Export invoice | EST / EIN | Zero-rated variant — GST suppressed under LUT or applied for refund; see the export invoice guide |
| Credit note | ACN | Auto-raised on a sales return against the dispatch, reversing invoice value; see sales returns and credit notes |
| Cancelled invoice | CIN | A voided invoice — kept on record, with its billed quantity released so the dispatch can be re-billed |
The variant that surprises people is the cancelled invoice. Under GST you do not delete or overwrite a posted invoice; you cancel it, and the cancelled number remains in the series for audit. What good software adds is the release step: cancellation frees the dispatched quantity the invoice had consumed, so the same goods can be re-billed on a correct invoice without tripping the double-bill guard.
Want to see a compliant tax invoice raised in under a minute?
We will raise a live GST invoice against a dispatch — HSN, CGST/SGST/IGST, charges, rounding and amount in words filled automatically — on your own items, in a 30-minute demo.
Raise it against the dispatch — the double-bill guard
The most consequential invoicing decision is not a field at all — it is what the invoice is raised against. An invoice typed as a standalone document reconciles against nothing. An invoice raised against its source dispatch or order behaves differently:
- Every invoice line carries an "Against Dispatch" reference back to the goods that actually left.
- The system tracks the already-invoiced quantity per dispatch line, so a new invoice can only bill the un-invoiced remainder — the same quantity can never be billed twice.
- Anything dispatched but not yet invoiced appears on a pending-to-bill report — the order-vs-invoice reconciliation that catches missed billing.
- Cancelling an invoice releases its consumed quantity, so re-billing is clean rather than blocked or duplicated.
This one discipline eliminates the two most expensive billing errors an SME makes — double billing (which costs customer trust and credit notes) and missed billing (which costs revenue, silently).
How Fast Billing Software builds the invoice
Fast Billing Software implements everything on this page as one flow. Its GST Tax Invoicing module raises the invoice from a confirmed order or dispatch, pulls HSN codes and GST rates from the item and party tax masters, decides the CGST/SGST/IGST split from the buyer's GSTIN, attaches freight and packing charge heads, rounds the total and generates the amount in words in Indian numbering automatically. The double-bill guard is built in: quantities already invoiced are locked, cancellation releases them, and the order-vs-invoice report shows what is still pending to bill.
Around the invoice, credit and debit notes handle returns and corrections, payments and receipts record what customers pay against each invoice with advance adjustment, and every confirmed document posts to Tally as a sales voucher with GST on the correct ledgers — nothing re-keyed. Invoice and dispatch details also carry the data e-way bills and e-invoicing need, via GST, e-Way Bill & e-Invoice.
One invoice, every rule applied automatically
A Pune manufacturer dispatches 40 gearbox housings to a Mumbai buyer and 60 to a Bengaluru buyer on separate challans. The billing clerk raises two invoices against those dispatches. The Mumbai invoice picks 9% CGST + 9% SGST; the Bengaluru invoice picks 18% IGST — both decided from the buyers' GSTINs, with HSN codes from the item master, freight added as a charge head, totals rounded and spelled out in words. When the clerk tries to bill the Mumbai dispatch a second time, the guard shows zero quantity available.
Frequently asked questions
What fields are mandatory on a GST tax invoice?
Supplier name, address and GSTIN; a consecutive invoice number and date; buyer name, address and GSTIN (for B2B); place of supply and delivery address; an HSN or SAC code on every line; description, quantity, unit and taxable value; GST shown as CGST + SGST (intra-state) or IGST (inter-state); the total value, normally also in words; and a signature. Billing software fills these from party, item and tax masters so nothing is missed.
When do I charge CGST and SGST versus IGST?
Same state as the buyer: split the rate in half as CGST + SGST — an 18% item bills as 9% + 9%. Different state: one IGST at the full rate. The buyer's GSTIN (its first two digits are the state code) and the place of supply decide it, and good software applies the split automatically.
Is amount in words required on a tax invoice?
It is standard and expected Indian practice — the total spelled out in Indian numbering (lakh and crore) prevents disputes over a misread figure and is looked for by buyers and auditors. Software generates the words from the rounded total, so words and digits can never disagree.
Can I cancel or edit a tax invoice after issuing it?
Never silently edit a posted invoice. Reduce value with a credit note, increase it with a debit note, or cancel the whole invoice if it is wrong. Good software keeps the cancelled number on record and releases the dispatched quantity it had consumed, so the goods can be re-billed correctly on a fresh invoice.
How is GST calculated on freight and other charges?
Charges you recover from the buyer — freight, packing, insurance, loading — form part of the invoice value and carry GST as configured, typically at the rate of the underlying supply. Configure charge heads once, with your CA's confirmation, and every invoice inherits the treatment.