How to Create a GST Invoice in India – Step-by-Step Guide (2026)

If you run a GST-registered business in India, every B2B sale requires a proper tax invoice. Get it wrong and your client cannot claim Input Tax Credit (ITC) — which means payment delays, disputes, and compliance headaches for both sides.

This guide covers exactly what goes on a GST invoice, how to calculate tax correctly, and how to create one in minutes without errors.

What is a GST Invoice?

A GST invoice is a legal document issued by a GST-registered supplier to a buyer. It records the goods or services supplied, the value, and the applicable GST — and is the primary document your buyer uses to claim Input Tax Credit.

Under the GST Act, a registered taxpayer supplying taxable goods or services must issue a tax invoice. There is no option to skip it.

Who Needs to Issue a GST Invoice?

You must issue a GST invoice if:

• Your business is registered under GST (annual turnover exceeds ₹40 lakh for goods or ₹20 lakh for services, or you have voluntarily registered)
• You are supplying taxable goods or services to another GST-registered business

Mandatory Fields on a GST Invoice

The GST Act specifies exactly what must appear on a valid tax invoice. Missing even one field can make it non-compliant.

1. Supplier details

• Full legal name of your business
• Complete registered address
• GSTIN (GST Identification Number)

2. Invoice details

• A unique, consecutive invoice number (up to 16 characters; letters, numbers, and hyphens allowed)
• Invoice date

3. Buyer details

• Name and address of the recipient
• GSTIN of the recipient (required for B2B)
• Place of supply (state)

4. Line item details

• Description of goods or services
• HSN code (for goods) or SAC code (for services)
• Quantity and unit of measurement
• Unit price and total value before tax

5. Tax details

• Tax type: CGST + SGST (intra-state) or IGST (inter-state)
• Rate and amount of each tax component

6. Total invoice value

Total amount payable including GST — in both figures and words.

7. Signature

Signature or digital signature of the authorised signatory.

CGST vs SGST vs IGST — Which Tax to Apply?

This is where most first-time invoicers go wrong. The rule is straightforward:

How to Calculate GST on an Invoice

Intra-state example (CGST + SGST)

You are in Maharashtra, your client is in Maharashtra. You invoice ₹10,000 for IT services at 18% GST.

• Taxable value: ₹10,000
• CGST @ 9%: ₹900
• SGST @ 9%: ₹900
• Total invoice value: ₹11,800

Inter-state example (IGST)

You are in Maharashtra, your client is in Karnataka. Same service, same rate.

• Taxable value: ₹10,000
• IGST @ 18%: ₹1,800
• Total invoice value: ₹11,800

Invoice Numbering Rules

GST invoices must follow a sequential numbering series within a financial year (April to March):

• Each invoice number must be unique
• Numbers must be consecutive — no gaps
• The series resets at the start of each financial year
• Prefixes are allowed (e.g. INV-2026-0001)

Step-by-Step: How to Create a GST Invoice

1. Set up your company details
   Have your registered business name, address, GSTIN, PAN, and state ready. Your state determines whether CGST+SGST or IGST applies on each invoice.
2. Add your client
   Collect your client’s company name, billing address, GSTIN (mandatory for B2B), and state.
3. Add the line items
   For each product or service: description, quantity, unit (hrs, pcs, months), unit price, and applicable GST rate.
4. Verify the tax calculation
   Is the tax type correct? (Same state = CGST+SGST, different state = IGST.) Is the GST rate correct for each item? Does the total add up?
5. Add payment terms
   Include the due date, bank account or UPI details, and any notes such as “Payment due within 30 days.”
6. Issue and send the invoice
   Send via email (PDF attachment), WhatsApp (link or PDF), or a public share link. Keep a copy — you will need it for GSTR-1 filing.

Common Mistakes to Avoid

Wrong tax type

Applying CGST+SGST when the buyer is in a different state is the most common error. Your buyer cannot claim ITC correctly if the tax type is wrong.

Missing GSTIN

Always include your buyer’s GSTIN on B2B invoices. Without it, they cannot claim ITC.

Non-sequential invoice numbers

Skipping or reusing invoice numbers causes problems during GST audits. Use software that handles numbering automatically.

Incorrect HSN/SAC codes

Using the wrong code can trigger scrutiny. Check the official CBIC HSN/SAC list if you are unsure.

Rounding errors

GST must be calculated on the taxable value — not on a rounded total. Use proper invoicing software to eliminate manual calculation errors.

How Long Must You Keep GST Invoices?

Under GST rules, you must retain all tax invoices for a minimum of 6 years from the due date of the annual return for that year. Store digital copies in a secure, accessible location.

Frequently Asked Questions