GST invoices for small businesses: a plain-language walkthrough

This is a plain-language guide for small businesses in India on what a GST tax invoice needs: the parties, a unique number, HSN or SAC codes, the tax split and the place of supply. It is general information, not tax advice.

This post is general information, not tax advice. GST rules, rates, thresholds and forms are changed by notification, often. Before you rely on anything below, check it against the current rules on the official GST portal and with your chartered accountant.

Many small businesses learn GST invoicing by copying an invoice someone else sent them. That mostly works until it does not: a buyer cannot claim credit because a field is missing, a number is repeated, or the tax is split the wrong way. This walkthrough goes through what a normal GST tax invoice contains, in the order you would fill it in, and where small businesses most often slip.

First, which document do you need?

Not every sale needs a tax invoice. In outline:

• Tax invoice. Issued by a registered business that charges GST. This is the document your buyer uses to claim input tax credit.
• Bill of supply. Issued instead of a tax invoice when you do not charge GST on the sale: for example when you are registered under the composition scheme, or when the goods or services are exempt.
• Credit note and debit note. Issued to reduce or increase the value of an earlier invoice, for example for a return, a discount agreed afterwards, or a correction.
• Receipt voucher / advance. Documents for money received before the supply happens.

If you are not sure which applies to you, that is the first question for your accountant. It depends on your registration type and what you sell.

The fields on a tax invoice

Rule 46 of the CGST Rules, 2017 lists what a tax invoice must contain. In plain terms:

1. Supplier details. Your name, address and GSTIN.
2. Invoice number. A unique, consecutive serial number for the financial year. The rule limits the length (16 characters) and the characters you can use (letters, numbers, hyphen and slash).
3. Invoice date.
4. Buyer details. Name and address; and the buyer’s GSTIN if they are registered. If the buyer is not registered, the rules have different requirements depending on the value of the invoice.
5. Description of the goods or services.
6. HSN or SAC code. HSN codes classify goods and SAC codes classify services. How many digits you must show depends on your turnover; the thresholds have changed over time, so check the current notification.
7. Quantity and unit for goods.
8. Total value, discount and taxable value.
9. Tax rate and amount, split into CGST and SGST (or UTGST), or IGST, and cess where it applies.
10. Place of supply, with the state name and code, where the supply is inter-state.
11. Whether tax is payable under reverse charge.
12. Signature or digital signature of the supplier or authorised person.

Treat that list as the shape of an invoice, not a replacement for the rule. For the exact wording and exceptions, read the rule itself or ask your accountant.

The part people get wrong: CGST, SGST and IGST

The tax is split according to where the supply happens.

• If you (the supplier) and the place of supply are in the same state, the GST is charged as two halves: CGST goes to the central government and SGST to the state. For an 18% supply, that is 9% and 9%.
• If the place of supply is in a different state, the whole amount is charged as IGST. For an 18% supply, that is 18% IGST.

The mistake we see most often is using the buyer’s billing address instead of the place of supply. For most services, the place of supply follows rules in the IGST Act, and it is not always where the buyer’s head office sits. If your buyer is a company with branches, ask which GSTIN they want on the invoice, because that determines the state.

Another common slip is applying a tax rate from memory. Rates vary by item and change by notification. Look the rate up against the HSN or SAC code, every time you add a new product or service, and save it in your item list so you reuse the right one.

Numbering and dates

Invoice numbers must be unique within the financial year (1 April to 31 March) and consecutive. A few practical points:

• Do not reuse a number, even for a cancelled invoice. If you cancel an invoice, record it as cancelled and keep the number used.
• Decide on a format and keep to it, for example 2026-27/0001. A series by financial year makes it simple to start fresh each April.
• If you use more than one series (for example for different branches), check with your accountant how to set them up.
• For services, the invoice generally has to be issued within a fixed number of days from the supply. The period depends on the type of supplier, so confirm it for your business.

E-invoicing

Businesses above a certain turnover must generate invoices through the government’s e-invoicing system, which registers the invoice and returns an invoice reference number and a QR code. The turnover limit has been lowered over time. If you are near the limit, plan ahead, because switching mid-year is a nuisance. Ask your accountant for the current threshold and whether it applies to you.

A checklist before you send

Run through this each time, or build it into a template.

• Your name, address and GSTIN are correct.
• The invoice number is unique and in sequence.
• The buyer’s name, address and GSTIN (if registered) are right, and match the GSTIN you want the supply recorded against.
• Each line has a clear description and the right HSN or SAC code.
• The taxable value, discount and tax rate are correct per line.
• The tax is split correctly: CGST and SGST for same-state supplies, IGST for inter-state.
• The place of supply is stated where required.
• Reverse charge is stated where applicable.
• The invoice carries a date, and was issued in time.
• You have kept a copy and logged it in your books.

Keeping the books in step

An invoice is only half of the job. The other half is making sure the figures flow into your records and returns. Good habits:

• Record each invoice in your accounting software when you issue it, not at month end.
• Match payments to invoices so that you can see which are open. Chasing a late payment is easier with a clean list.
• Reconcile every month. Compare what your books say you billed with what you plan to report in your GST returns.
• Keep a single customer list with GSTINs, validated, so you are not retyping a 15-character number each time.
• Export the invoice register for your accountant on the schedule they ask for.

Where Nubo fits

Nubo Invoicing lets you create invoices and estimates, set named tax rates, store a tax ID on each client, print a tax note such as a reverse-charge statement on the document, track payments and reminders, set up recurring invoices, and export reports with a CSV for your accountant. Nubo Accounting keeps the double-entry books, imports bank statements and runs the standard reports.

We want to be careful here. In Nubo Invoicing today you can enter your tax ID and each client’s, add named taxes such as CGST and SGST that each print with their rate, and type an HSN or SAC code into a line description. There is no separate HSN or SAC field, no place-of-supply field and no e-invoice generation (invoice reference number and QR code), so a business that must e-invoice needs another tool for that step. Check any invoice template against the rule before you use it. Do not assume that software makes an invoice compliant; the responsibility for the content remains with the business that issues it.

Published 21 October 2026. General information, not tax advice.