GST invoice rules every small Indian shop should know
If you sell goods or services and you're registered under GST, the humble invoice is a legal document. Here's what it must contain, in language that doesn't need a CA to decode.
1. What makes an invoice a "tax invoice"
A valid GST tax invoice has to carry a handful of mandatory fields: your shop's name, address and GSTIN; a consecutive invoice number for the financial year; the date; the customer's details (and GSTIN for B2B); a description of goods or services with HSN/SAC codes; taxable value; the tax rate and amount; and the place of supply.
The invoice number must be consecutive and unique for the financial year — gaps and duplicates are exactly what an audit looks for.
2. HSN codes are not optional
Every item needs the correct HSN code (or SAC for services). The number of digits you must show depends on your turnover, but the safest habit is to store the code against each item once, so every invoice carries it automatically.
3. CGST + SGST, or IGST?
This trips up most shopkeepers. It depends on the place of supply:
- Same state as your shop → split the tax into CGST + SGST.
- Different state → charge a single IGST at the combined rate.
Getting this wrong means your GSTR-1 won't reconcile. Good billing software reads the customer's state and applies the right split for you.
4. When e-invoicing (IRN) applies
Businesses above the prescribed turnover threshold must generate an e-invoice — an invoice registered on the government portal that returns an IRN and a signed QR code. If you're under the threshold today, build the habit now; thresholds have only come down over time.
5. Returns need credit notes
When a customer returns goods, don't just delete the bill. Issue a credit note (CDNR for registered buyers, CDNUR for unregistered) so your output tax and filings stay correct.
The shortcut
You can memorise all of this — or you can let your billing tool enforce it. Pride POS's GST billing stamps HSN codes, picks the right tax split by state, generates IRN where needed, and exports GSTR-1 and GSTR-3B every month. Try it free for 5 days →