Which invoice type should you issue? A plain-English guide for Indian sellers.
Indian GST law requires different documents for different situations. Using the wrong one — like issuing a proforma when you should issue a tax invoice — can create compliance problems for your buyer and for you. Here's when to use each one.
Generate the right invoice in GrowkitThe six invoice types under Indian GST
Indian GST recognises six types of invoicing documents, each for a different situation. Growkit supports the first four — credit and debit notes are in Phase 2.
| Document type | When to use | Carries GST | Buyer claims ITC | In Growkit |
|---|---|---|---|---|
| GST Tax Invoice | Every taxable B2B sale above ₹200 by a GST-registered seller | Yes | Yes | ✓ Live |
| Proforma Invoice | Before the buyer confirms the deal — a quote | No | No | ✓ Live |
| Bill of Supply | Composition scheme sellers or exempt goods | No | No | ✓ Live |
| Receipt Voucher | Advance payment received before supply | Yes (reverse) | Provisionally | ✓ Live |
| Credit Note | Post-invoice price reduction or return | Yes (reduction) | Reversed | Phase 2 |
| Debit Note | Post-invoice price increase | Yes (addition) | Additional | Phase 2 |
1. GST Tax Invoice — the most common document
The GST tax invoice is the primary sales document for any GST-registered seller making a taxable supply. You issue it at the time of supply (or before, for services). It carries GSTIN of both seller and buyer, HSN codes, GST rates, and must be numbered sequentially. Most of your day-to-day invoicing will be tax invoices.
- Regular product sale from your catalog
- Job card consignment — each delivery phase
- Service completion
- Any supply where GST applies and you're GST-registered
2. Proforma Invoice — for quotes and estimates
A proforma invoice looks exactly like a tax invoice but has one critical difference: it creates no legal or tax liability. It's a quote — you're telling the buyer "this is what it will cost if you proceed." The buyer uses it to get internal approval, arrange financing, or for customs pre-clearance on imports. Once they confirm, you convert it to a tax invoice. In Growkit, this conversion is one click and preserves the original proforma unchanged in your records.
3. Bill of Supply — for composition sellers and exempt goods
If you're on the GST composition scheme, you cannot collect GST from buyers. Every sale must be documented with a Bill of Supply — not a tax invoice. The same applies if you're selling goods or services that are exempt from GST (fresh produce, healthcare, education, etc.) even as a regular GST-registered seller. A Bill of Supply shows the sale amount but no GST — the buyer cannot claim ITC on it.
- You are registered under the GST composition scheme
- You are selling GST-exempt goods or services
- Export of services (treated as zero-rated — a Bill of Supply variant)
4. Receipt Voucher — for advance payments
When a buyer pays you before you supply the goods or complete the service, you must issue a Receipt Voucher. It acknowledges the advance and records the GST on it (calculated in reverse — the advance is treated as inclusive of GST). When you later raise the final tax invoice, the advance and its GST are netted against the invoice — the buyer pays only the balance.
- Buyer pays a deposit or advance before production starts
- Mobilisation advance for a service contract
- Any money received before the supply is complete
5 and 6. Credit Note and Debit Note — for post-invoice corrections
Sometimes an invoice needs to be corrected after it's been issued. In GST, you cannot simply cancel and re-issue an invoice for a registered buyer — you must issue a Credit Note (to reduce the amount) or a Debit Note (to increase it). A Credit Note is issued when the buyer returns goods, gets a discount after the invoice, or you made a pricing error that overcharged. A Debit Note is issued when you undercharged. Both are linked to the original invoice and adjust the GST accordingly.
Quick decision guide — which document to issue
| Situation | Document to issue |
|---|---|
| Regular sale, GST-registered seller, taxable goods | GST Tax Invoice |
| Buyer hasn't confirmed yet — sending a quote | Proforma Invoice |
| You're on composition scheme | Bill of Supply |
| Selling exempt goods (fresh produce, healthcare, etc.) | Bill of Supply |
| Received advance payment before supply | Receipt Voucher |
| Need to reduce amount on a previously issued invoice | Credit Note (Phase 2) |
| Need to increase amount on a previously issued invoice | Debit Note (Phase 2) |
Frequently asked questions
Can I issue a proforma invoice and then just collect payment without converting to a tax invoice?
No. If a sale has been completed and payment has been received, you must issue a GST tax invoice. Using only a proforma for a completed sale means your buyer cannot claim ITC, and you are non-compliant under GST rules.
What's the difference between a credit note and a cancellation?
A cancellation voids the invoice entirely — used when no supply happened at all. A credit note is issued when supply happened but the amount needs to be reduced — for a return, a post-invoice discount, or a pricing correction. Credit notes are linked to the original invoice.
Do all six document types need sequential numbering?
Yes. Each document type should have its own numbering series — tax invoices, credit notes, debit notes, and receipt vouchers should each have separate, sequential numbers within the financial year. Proformas can have their own series too, for internal tracking.
I'm a composition seller but sometimes I sell taxable goods to registered buyers. Which document do I issue?
Composition scheme sellers cannot issue tax invoices or charge GST, regardless of who they're selling to. All sales — even to GST-registered buyers — must be documented with a Bill of Supply. The registered buyer cannot claim ITC on it. If you regularly sell to registered buyers who need ITC, consider whether the composition scheme is the right fit for your business.
Issue the right document, every time
Growkit supports all four live invoice types — tax invoice, proforma, bill of supply, and receipt voucher.
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