Invoicing & GST Guides

The paperwork side of GST: what a compliant tax invoice must actually contain, how invoice numbers have to be structured, when a bill of supply replaces a tax invoice, and how to read a GSTIN. Start here if you need to know whether an invoice you're about to send is legally correct.

"Compliant" here has a specific legal meaning, not a vague sense of looking professional: Rule 46 of the CGST Rules, 2017 lists the fields a tax invoice must carry — both parties' GSTIN, a consecutive serial number, the HSN/SAC code for each line, the place of supply, and the CGST/SGST or IGST split. Miss one and the invoice isn't just untidy, it's technically non-compliant, which matters on both sides of the transaction: it can jeopardize your buyer's ability to claim input tax credit against it, and it creates audit risk for you as the issuer if the pattern repeats across many invoices.

The numbering requirement in particular (Rule 46(b)) exists as an anti-backdating control — a consecutive series is what lets a tax officer confirm nothing was skipped, reissued, or slotted in after the fact. Not every seller issues a standard tax invoice, either: composition-scheme dealers are barred from charging GST on the invoice at all and issue a bill of supply instead, exempt or nil-rated supplies use a bill of supply too, and marketplace sellers (Amazon, Flipkart) have an extra TCS wrinkle layered on top of the standard fields. There's also a hard deadline for when the invoice has to go out in the first place — 30 days from supply for services, at or before delivery for goods — which is easy to miss on an invoice you delayed for other reasons.

How GST actually splits on an invoice, how to classify what you're selling, who pays the tax when the buyer is supposed to, and how the credit side of GST works. This cluster covers the calculation logic behind the numbers on your invoice.

The CGST/SGST-vs-IGST split isn't arbitrary — it comes down to a single comparison: the state code embedded in your GSTIN against the state code in your customer's. Same state, and the sale attracts CGST plus SGST in equal halves; different states, and it's IGST instead, at the same combined rate. Getting this backwards on even one invoice is a real, correctable-but-annoying mistake, since the wrong tax type was reported to the wrong government account.

Underneath that split sits classification: every product or service you invoice needs an HSN (goods) or SAC (services) code, and the code — not a general sense of what category something falls into — determines the actual rate charged. Two items that look similar to a buyer can carry genuinely different rates if their precise classification differs, which is why guessing a rate from a "similar" product is a real risk, not just imprecision. The number of digits required on the invoice itself also scales with your turnover, not a fixed rule for everyone.

Two further mechanics round this cluster out. Reverse charge flips the usual pattern — instead of the seller collecting and remitting GST, the buyer pays it directly to the government, which matters most for freelancers receiving certain services from unregistered or overseas suppliers. And input tax credit is the mechanism that stops GST from compounding at every step of a supply chain: the tax you paid on your own purchases can generally offset the tax you owe on your sales, provided it's properly documented and reported.

For freelancers and businesses billing clients outside India, or anyone creating a GST invoice for the first time. Covers the practical starting point — how to create your first invoice — through export-specific rules like the LUT and the e-invoicing mandate.

If you haven't registered for GST yet, the threshold question comes first: broadly ₹20 lakh in aggregate annual turnover for services, but that number isn't the whole rule — a single inter-state supply can trigger mandatory registration regardless of how far under the threshold your total turnover sits. This is exactly the kind of nuance that catches freelancers off guard the first time a client happens to be in a different state.

Billing outside India entirely changes the mechanics rather than just adding a step. Exporting services under a Letter of Undertaking (LUT) lets you invoice without charging GST at all, without the alternative of paying IGST upfront and claiming a refund later — a meaningfully simpler path once the LUT is filed. Above a certain turnover threshold, e-invoicing becomes mandatory too, requiring every B2B invoice to be registered on the government's Invoice Registration Portal and carry a signed IRN before it's valid.

Clients in the UK or EU add another layer: you generally shouldn't charge their VAT at all, since the reverse-charge mechanism shifts that obligation onto the client in their own country, and your invoice needs to say as much rather than staying silent on it. US clients are the simplest case in one sense — there's no federal sales-tax equivalent to GST/VAT, and state-level sales tax rarely applies to a foreign freelancer's services — but that simplicity is exactly why it's worth confirming explicitly rather than assuming, since the absence of a rule is easy to mistake for uncertainty about what to do.

For freelancers, contractors and small businesses based outside India billing in their own local market — not a GSTIN or CGST/SGST/IGST in sight. Covers the invoice fields every country expects, plus country-specific rules like VAT registration and payment terms.

The universal fields barely change from country to country: a unique invoice number, both parties' details, a clear line-item description, and a total. What genuinely differs is the tax layer once you cross a registration threshold — the UK requires a VAT number and VAT breakdown past £90,000 in taxable turnover, Australia requires an ABN and 10% GST past $75,000 (with a separate $82.50 rule for when a full tax invoice is required at all), Singapore requires a UEN and 9% GST past S$1 million, the UAE requires a TRN and 5% VAT past AED 375,000, and Canada layers federal GST/HST on top of provincial rules past a $30,000 small-supplier threshold. Same underlying pattern — register once you cross a turnover line, then add a tax ID and a tax breakdown — different number and different acronym each time.

Two concerns sit on top of all of that and apply no matter which country either side is in: what payment terms you actually put on the invoice, and what currency you bill in. Net 30 versus Net 60 isn't a tax question at all — it's a cash-flow one, and it's worth deciding deliberately rather than defaulting to whatever a client's procurement team hands you. Multi-currency invoicing raises its own separate question of who carries the exchange-rate risk between the invoice date and the day you're actually paid — a decision that has nothing to do with which country's tax rules apply, but affects every cross-border invoice regardless.

Not every billing document is a tax invoice. This cluster covers the documents that come before one (proforma) and after one (credit/debit notes), plus how invoice fields differ when you're billing goods versus services.

A typical client relationship generates documents in a specific order, and confusing them causes real problems. A proforma invoice comes first — a pre-commitment quote that looks like an invoice but carries no tax or legal weight, useful for getting a client's sign-off before work starts. The tax invoice is the actual legal document, issued once the supply happens, and it's the one that has to follow every rule in the Compliance & Format cluster above. If something about that invoice turns out to be wrong after it's sent — a return, a discount agreed too late, an undercharge — you don't edit or reissue it; you document the correction as a separate credit note (reducing) or debit note (increasing), both referencing the original invoice under Section 34.

Two more concerns wrap around that core sequence. Payment terms and late-fee rules govern what happens between issuing the invoice and actually getting paid — India's MSMED Act gives Udyam-registered small suppliers a real statutory backstop here, well beyond what an ordinary invoice's payment-terms line can enforce on its own. And for a client you bill every month rather than once, recurring invoicing is less about new rules and more about a workflow that keeps the numbering, dates, and amounts consistent cycle after cycle without starting from scratch each time. Finally, if you're ever unsure whether "invoice," "bill," or "receipt" is the right document to send, that distinction — before-payment request versus after-payment confirmation — is worth getting straight before it causes confusion with a client.