What is a GST Invoice? Complete Guide for Indian Shopkeepers

What is a GST Invoice?

A GST invoice is a document issued by a GST-registered seller to a buyer listing the goods or services supplied, their value, and the GST charged. It is legally required for every taxable supply and is essential for the buyer to claim Input Tax Credit (ITC).

Mandatory Fields on a GST Invoice

Under GST law, every tax invoice must contain:

1. Invoice number — unique, sequential, maximum 16 characters per financial year
2. Invoice date
3. Supplier details — name, address, GSTIN
4. Recipient details — name, address, GSTIN (if registered)

5. HSN/SAC code — for goods (HSN) or services (SAC)

6. Item description, quantity, unit, total value

7. Taxable value — before GST

8. Rate and amount of GST — CGST + SGST for intra-state, IGST for inter-state

9. Place of supply

10. Signature of the supplier

Get any of these wrong and the invoice is legally invalid for the buyer's ITC claim.

Tax Invoice vs Bill of Supply

• Tax Invoice — used for taxable supplies, shows GST amounts
• Bill of Supply — used by composition scheme dealers or for exempt supplies, shows NO GST

How CGST / SGST / IGST Splits Work

• Intra-state sale (buyer and seller in same state): tax splits as CGST (half) + SGST (half). E.g. 18% GST = 9% CGST + 9% SGST.
• Inter-state sale (different states): full rate charged as IGST. E.g. 18% GST = 18% IGST.

A good billing system computes this automatically from the place of supply — never do this manually.

Common Mistakes to Avoid

• Missing or invalid GSTIN
• Wrong HSN code leading to wrong tax rate
• Not maintaining sequential invoice numbering
• Mixing inter-state and intra-state tax treatment

Using digital billing software like managemycounter eliminates all of these by automating the compliance.