What a GST invoice must show, and the mistakes that cost you

A bill is not just a receipt. Under GST it is the document your customer claims input credit against, so if a field is missing or the number is repeated, the problem comes back to you months later.

Here is what a tax invoice has to carry, in plain words, and the mistakes that show up most often in bills we see from small businesses.

What every tax invoice must show

A registered business raising a tax invoice needs all of this on the document:

1. Your details. Business name, address and GSTIN.
2. A serial number. Up to 16 characters, unique, and running in an unbroken series for the financial year.
3. The date the invoice was raised.
4. The customer. Name, and their GSTIN if they are registered. For an unregistered customer with a bill above ₹50,000, the name, address and state go on as well.
5. What was sold. Description, HSN or SAC code, quantity, unit and rate.
6. The money. Taxable value, any discount, the tax rate, and the tax amount shown separately as CGST and SGST, or as IGST.
7. Place of supply — the state the supply is treated as happening in. It decides which tax applies.
8. A signature or digital signature.

A composition dealer does not raise a tax invoice at all. They issue a bill of supply, which carries no tax and says so on the face of it. The same applies to exempt goods.

Numbering: one series, no gaps, restarted every April

The serial number is the part small businesses get wrong most often, usually because bills are written in more than one place — a book at the counter, a spreadsheet in the office, an app on someone’s phone.

• Keep one series for the business, not one per person or per counter.
• It must be unbroken. If a bill is cancelled, the number stays used; do not reuse it.
• It restarts in April, with the financial year, which is why numbers usually carry the year: INV/2026-27/0001.

The practical test is simple: can you produce every number in order for a month, with nothing missing? If the answer depends on which book someone was holding, the system is the problem, not the person.

CGST and SGST, or IGST: place of supply decides

The rule is about states, not distance. Compare the place of supply with the state you are registered in:

• Same state — charge CGST and SGST, half the rate each. An 18% item becomes 9% + 9%.
• Different state — charge IGST at the full rate, 18% as one line.

For goods the place of supply is normally where they are delivered. For services to a registered customer it is that customer’s registered address, so the GSTIN on the bill is worth checking before you decide the tax.

Getting this wrong is expensive twice over: your customer cannot claim the credit, and you have to correct the return.

When a bill is wrong: credit notes, not correction fluid

Once an invoice is issued you do not edit it. If goods come back, the price was too high, or the bill was raised twice, you issue a credit note against it. The credit note has its own series, refers to the original invoice, and reduces what the customer owes.

Two things to keep in mind. A credit note has a deadline — it must be declared in a return filed by 30 November following the end of that financial year, or the annual return for that year, whichever comes first. And if the customer had already paid, the credit note leaves you owing them a refund, which should be recorded rather than remembered.

The mistakes that come back later

• Two invoices with the same number, because two people were billing at once.
• A missing GSTIN on a business customer’s bill, so they cannot claim credit and ask for a fresh copy weeks later.
• CGST and SGST charged on an interstate sale, or the reverse.
• No HSN code. Small businesses generally need 4 digits on B2B bills, and 6 once turnover crosses ₹5 crore.
• Rounding done differently every time, so the ledger never quite matches.
• Bills that exist only on paper, which makes the GST return a night of typing at the end of the month.

None of these are exotic. They are all what happens when billing is spread across a book, a phone and a spreadsheet.

What good billing software does about it

The job of software here is boring and valuable:

• Gives every bill the next number in one series, and restarts it in April by itself.
• Decides CGST and SGST or IGST from the place of supply, instead of leaving it to memory.
• Keeps the customer’s GSTIN, address and HSN codes so nobody retypes them.
• Produces a credit note that points at the original invoice.
• Totals the month by tax rate, so filing is reading a page rather than rebuilding it.

Rules change, and your accountant is the final word on your particular case. What does not change is the need for one series, one place where bills live, and totals you can trust at the end of the month.