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Intra-state invoice example
For a sale within the same state, GST is split equally between CGST and SGST. If a Maharashtra seller bills a Maharashtra client Rs 10,000 for a taxable service at 18%, the GST is Rs 1,800: Rs 900 CGST and Rs 900 SGST.
The invoice total is Rs 11,800. The invoice should show the taxable value, rate, CGST, SGST, and total clearly, plus required business fields such as GSTIN and invoice number when applicable.
For goods at a different rate—say a 12% GST item worth Rs 25,000 sold within the same state—the tax would be Rs 3,000 total: Rs 1,500 CGST and Rs 1,500 SGST, for an invoice total of Rs 28,000. The split is always equal between CGST and SGST for intra-state supplies.
Inter-state invoice example
For a sale from one state to another, use IGST instead of splitting the tax. A Rs 10,000 service billed from Maharashtra to Karnataka at 18% has Rs 1,800 IGST and a total of Rs 11,800.
The total tax amount is the same in this simple example, but the tax line changes. Using CGST and SGST on an inter-state sale is a common invoice mistake.
For goods, the same principle applies. A Rs 50,000 shipment of taxable goods from Gujarat to Tamil Nadu at 28% GST would carry Rs 14,000 IGST (not Rs 7,000 CGST + Rs 7,000 SGST). The distinction matters for input tax credit claims and return filing.
Mandatory GST invoice fields
A compliant GST tax invoice generally must include: supplier name, address, and GSTIN; a consecutive invoice number unique for the financial year; the invoice date; recipient name, address, and GSTIN (if registered); HSN code for goods or SAC code for services; description, quantity, and unit of goods or services; taxable value; tax rate and tax amount broken into CGST/SGST or IGST; and the total invoice value.
For invoices above certain value thresholds, additional details such as the place of supply and reverse charge applicability may be required. Invoices to unregistered recipients may omit the recipient GSTIN but should generally still include the recipient name and address when the invoice value exceeds Rs 50,000.
Maintaining proper invoice serial numbering is important. The GST law generally requires that invoice numbers be consecutive and unique within a financial year. Many businesses use a format like INV/2026-27/0001 to keep numbering organized across years.
Rate, HSN, and goods vs services comparison
GST rates depend on the item or service classification. Many services are 18%, but goods can be 0%, 5%, 12%, 18%, 28%, or special rates. Always confirm HSN/SAC and exemptions before issuing a compliance invoice.
Goods invoices typically require HSN codes (Harmonized System of Nomenclature), while services use SAC codes (Services Accounting Codes). The level of HSN detail required on the invoice may depend on your annual turnover—businesses above certain thresholds may need to report 4-digit or 6-digit HSN codes.
Common goods vs services differences on invoices: goods invoices often include quantity, unit, and per-unit price, while services invoices may describe the scope of work instead. Both should clearly show the taxable value and applicable tax rates. When in doubt, check with your CA or the CBIC HSN/SAC search tool.
E-invoicing under GST
India has progressively expanded mandatory e-invoicing for GST-registered businesses. E-invoicing requires eligible businesses to generate invoices through the Invoice Registration Portal (IRP), which returns a unique Invoice Reference Number (IRN) and a digitally signed QR code. The turnover threshold for mandatory e-invoicing has been lowered over time and may apply to businesses with aggregate turnover above Rs 5 crore (check for current thresholds).
E-invoicing does not change the tax calculation—CGST, SGST, and IGST amounts remain the same. However, the invoice must be reported to the IRP before or at the time of issuing it to the buyer. The IRP validates the invoice schema, generates the IRN, and signs the invoice with a QR code that can be verified later.
Businesses subject to e-invoicing should ensure their billing software or ERP supports the e-invoice JSON schema. Common issues include incorrect GSTIN formatting, missing HSN/SAC codes, and duplicate invoice numbers. Testing with the sandbox environment before going live is generally recommended.
Frequently Asked Questions
When do I use CGST and SGST?
Use CGST and SGST for intra-state supplies where supplier and place of supply are in the same state.
When do I use IGST?
Use IGST for inter-state supplies, imports, exports, and other cases where GST law requires integrated tax.
Who needs to comply with GST e-invoicing?
E-invoicing is generally mandatory for GST-registered businesses above certain aggregate turnover thresholds. The threshold has been lowered over time, so check the latest CBIC notification for current applicability.
How do debit notes and credit notes work under GST?
A debit note is issued when the taxable value or tax charged needs to be increased after the original invoice. A credit note is issued for reductions—such as returns, discounts, or corrections. Both must reference the original invoice and be reported in GST returns.