What is GST invoicing — and how does it work?
A GST invoice is a legally binding document that records a sale, shows the correct tax (CGST/SGST for intra-state, IGST for inter-state), and lets your buyer claim input tax credit. Getting it right matters — for your buyer and for your compliance.
Generate GST invoices freeWhat is a GST invoice?
A GST invoice is a document a GST-registered seller must issue for every taxable sale above ₹200. It records who sold what to whom, at what price, and how much tax was charged. The buyer uses it to claim Input Tax Credit (ITC) — so if you get the invoice wrong, your buyer can't claim their credit, and they'll come back to you to fix it.
What must a GST invoice include?
- Seller's name, address, and GSTIN
- Invoice number (sequential, max 16 characters, unique per financial year)
- Invoice date
- Buyer's name, address, and GSTIN (for B2B sales)
- HSN or SAC code for each item
- Description, quantity, and unit of measure
- Price per unit and total value
- Discount (if any) — shown separately
- Taxable value (after discount)
- GST rate and amount — CGST + SGST (intra-state) or IGST (inter-state)
- Total invoice value
- Signature or digital signature
CGST, SGST, IGST — which one applies?
Seller and buyer are in the same state (intra-state supply)
Delhi seller, Delhi buyer — CGST 9% + SGST 9% = 18% total GST
Seller and buyer are in different states (inter-state supply)
Delhi seller, Mumbai buyer — IGST 18% = 18% total GST
GST invoice numbering rules
- Maximum 16 characters
- Alphanumeric, hyphens, and slashes allowed
- Must be sequential within a financial year
- Must be unique — no two invoices can have the same number in the same FY
- Resets at the start of each financial year (April 1)
- Recommended format: INV-YYFYY-NNNNN (e.g. INV-2526-00042)
5 most common GST invoice mistakes Indian sellers make
Wrong HSN code
Buyer's ITC claim rejected. Penalty possible under GST audit.
Applying CGST/SGST on an inter-state sale
Wrong tax collected. Seller must refund the wrong tax and re-invoice with IGST.
Non-sequential invoice numbers
Red flag in GST audit. Can result in notices from tax authorities.
Showing discount after GST
GST must be calculated on value after discount — calculating on gross value overcharges tax.
No HSN code on invoice
Mandatory for turnover above ₹5 crore. Missing codes lead to e-invoice rejection.
Frequently asked questions
Is a GST invoice mandatory for every sale?
For GST-registered sellers, yes — for every taxable supply above ₹200 to a B2B buyer. For B2C sales below ₹200, a consolidated daily invoice is enough.
What is the difference between a tax invoice and a proforma invoice?
A tax invoice is a legal document that records an actual sale and has GST liability. A proforma invoice is a quote — no tax liability, no legal standing. It's used to give the buyer an estimate before they confirm the order.
When should I use IGST vs CGST/SGST?
Use IGST when your buyer is in a different state from your business. Use CGST + SGST when both seller and buyer are in the same state. Growkit detects this automatically from your GSTIN and your buyer's address.
Can I issue a GST invoice if I'm on the composition scheme?
No. Composition scheme sellers cannot collect or charge GST. They issue a Bill of Supply instead — which shows no GST amount. Growkit supports both formats.
Generate GST-compliant invoices in seconds
CGST/SGST vs IGST auto-detected. Sequential numbering. HSN codes from your catalog.
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