Key Takeaways
- A tax invoice under Section 31 of the CGST Act must be issued for every taxable supply by a registered person.
- Rule 46 prescribes 16 mandatory fields: GSTIN, serial number (max 16 characters), HSN/SAC, taxable value, tax breakup, and more.
- Time limit: before or at removal/delivery for goods; within 30 days of supply for services.
- E-invoicing is mandatory for businesses with AATO above Rs 5 crore from April 1, 2026 (Notification No. 17/2025-CT).
- HSN code digits depend on turnover: 2 digits (Rs 1.5 to 5 crore), 4 digits (Rs 5 to 10 crore), 6 digits (above Rs 10 crore).
- Wrong or missing invoice details can result in ITC denial to the buyer and penalty up to Rs 25,000 under Section 122.
The tax invoice is the foundational document of the GST system. Every input tax credit claim, every return reconciliation, and every audit trail begins with a correctly issued invoice. Yet many businesses still issue invoices that miss mandatory fields, use incorrect serial formats, or skip the HSN code entirely.
This guide covers the exact legal requirements for GST invoices as they stand in July 2026, including the expanded e-invoice mandate.
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What Is a Tax Invoice Under GST
Section 31 of the CGST Act, 2017 requires every registered person making a taxable supply to issue a tax invoice. This is not optional. The invoice serves three purposes simultaneously: it documents the transaction for the supplier, it enables ITC claims for the recipient, and it feeds data into the GST return ecosystem.
A tax invoice is distinct from a Bill of Supply (issued by composition dealers or for exempt supplies), a delivery challan (for goods sent on approval or for job work), and a receipt voucher (for advance payments).
16 Mandatory Fields on a GST Invoice (Rule 46, CGST Rules)
Rule 46 of the CGST Rules, 2017 specifies every field that must appear on a tax invoice. Missing even one field can invalidate the document for ITC purposes.
| # | Field | Requirement |
|---|---|---|
| 1 | Name of supplier | As registered on GST certificate |
| 2 | Address of supplier | Principal place of business |
| 3 | GSTIN of supplier | 15-character alphanumeric |
| 4 | Invoice serial number | Consecutive, unique per FY, max 16 characters |
| 5 | Date of issue | DD/MM/YYYY format |
| 6 | Name of recipient | As registered (if B2B) |
| 7 | Address of recipient | Billing/shipping address |
| 8 | GSTIN/UIN of recipient | Mandatory if recipient is registered |
| 9 | HSN/SAC code | Digits based on turnover tier |
| 10 | Description of goods/services | Clear, identifiable description |
| 11 | Quantity and unit | UQC (Unit Quantity Code) as per notification |
| 12 | Total value of supply | Before tax, before discount |
| 13 | Taxable value after discount | Value on which tax is computed |
| 14 | Rate and amount of tax | CGST + SGST/UTGST or IGST split |
| 15 | Place of supply | Mandatory for interstate; state name + code |
| 16 | Reverse charge indicator | "Yes" or "No" clearly stated |
Additionally, the invoice must carry the signature or digital signature of the supplier (or an authorized representative).
Invoice Serial Number Rules
The serial number must not exceed 16 characters. It must contain only alphabets, numerals, special characters (hyphen, slash), and must be unique and consecutive within a financial year. Businesses with multiple branches can use branch-specific prefixes, but each prefix series must maintain sequential numbering.
HSN/SAC Code Requirements by Turnover
| Annual Turnover | HSN Digits Required |
|---|---|
| Up to Rs 1.5 crore | Not mandatory (but recommended) |
| Rs 1.5 crore to Rs 5 crore | 2 digits |
| Rs 5 crore to Rs 10 crore | 4 digits |
| Above Rs 10 crore | 6 digits |
From April 2025, GSTN validates HSN codes at the return filing stage. Incorrect codes trigger auto-populated mismatches in GSTR-1.
Time of Issue: When Must the Invoice Be Raised
The time limits differ for goods and services:
For goods: The invoice must be issued before or at the time of removal (if goods are to be transported) or before or at the time of delivery to the recipient (in other cases).
For services: The invoice must be issued within 30 days from the date of supply of service. For banking and financial institutions, the time limit extends to 45 days.
Continuous supply of goods: Invoice at the time each statement of accounts is issued or each payment is received.
Continuous supply of services: Invoice before the due date of payment as specified in the contract, or before receipt of payment, whichever is earlier.
Revised Invoice (Section 31(3)(a))
A registered person may issue a revised invoice for supplies made between the date of application for registration and the date of actual grant of registration. This revised invoice must be issued within 30 days from the date of issuance of the registration certificate. Each revised invoice must reference the original invoice number and date.
E-Invoicing Requirements (2026 Update)
Current Threshold
From April 1, 2026, e-invoicing is mandatory for all businesses with aggregate annual turnover exceeding Rs 5 crore in any financial year from FY 2017-18 onwards (Notification No. 17/2025-CT, dated September 30, 2025).
How E-Invoicing Works
- Supplier generates invoice in standard JSON schema (as prescribed)
- Invoice is uploaded to the Invoice Registration Portal (IRP)
- IRP validates the invoice, generates a unique Invoice Reference Number (IRN), digitally signs it, and adds a QR code
- Signed invoice is returned to the supplier
- Invoice data auto-populates into GSTR-1 and the buyer's GSTR-2B
Key Compliance Points
- Invoices must be uploaded to IRP within 30 days of the invoice date (for businesses with turnover above Rs 100 crore, this is 7 days).
- An invoice without a valid IRN is not a valid tax invoice: the recipient cannot claim ITC on it.
- The original invoice must be issued in triplicate for goods (Original for Recipient, Duplicate for Transporter, Triplicate for Supplier). For e-invoices, the digital copy suffices.
- Export invoices must carry one of two endorsements: "Supply meant for export on payment of IGST" or "Supply meant for export under bond/LUT without payment of IGST."
Bill of Supply vs Tax Invoice
Not every supply requires a tax invoice. A Bill of Supply is issued in two scenarios:
- Composition dealers (registered under Section 10): They cannot charge GST separately, so they issue a Bill of Supply instead of a tax invoice.
- Exempt supplies: When the goods or services are wholly exempt from GST, a Bill of Supply is issued.
A Bill of Supply contains the same fields as a tax invoice except the tax rate and tax amount columns (since no tax is charged). The recipient of a Bill of Supply cannot claim any ITC.
Credit Notes and Debit Notes (Section 34)
Credit Note
A registered person issues a credit note when:
- The taxable value or tax charged in the original invoice exceeds the actual amount
- Goods are returned by the recipient
- Services are found deficient
The credit note must be declared in the GSTR-1 of the month in which it is issued, and the deadline for issuing a credit note is November 30 following the end of the financial year in which the original supply was made (or the date of filing the annual return, whichever is earlier).
Debit Note
Issued when the taxable value or tax charged in the original invoice is less than the actual amount. Same declaration and timeline rules as credit notes apply.
Both credit notes and debit notes must reference the original invoice number and date, and must carry their own unique serial numbers.
Self-Invoice for RCM Supplies
When a registered person receives supplies from an unregistered supplier that attract reverse charge (Section 9(4)), the recipient must issue a self-invoice. This self-invoice carries the recipient's own GSTIN as the issuer and is used to avail ITC on the reverse charge tax paid. The payment must be made to the supplier within 180 days.
Delivery Challan (Not an Invoice)
Certain movements of goods do not require a tax invoice at the time of movement. A delivery challan is used instead for:
- Goods sent for job work
- Goods sent on approval or sale-or-return basis
- Goods transported for reasons other than supply (e.g., branch transfer within same state if no separate registration)
The actual tax invoice is issued only when the supply is confirmed or completed.
Consequences of Wrong or Missing Invoice Details
The GST law treats invoice compliance seriously:
| Violation | Consequence |
|---|---|
| Missing mandatory fields | ITC denial to recipient (Section 16(2)(a)) |
| Invoice without valid IRN (where e-invoice applies) | Treated as if no invoice issued |
| Fraudulent invoice or invoice without supply | Penalty under Section 122: up to Rs 25,000 or tax amount, whichever is higher |
| Failure to issue invoice | Penalty of Rs 10,000 or tax amount due, whichever is higher (Section 122(1)(i)) |
For the recipient, claiming ITC on an invoice that lacks GSTIN, correct HSN, or proper tax breakup is a guaranteed audit finding. The ITC will be reversed with interest at 18% per annum.
Practical Checklist for Invoice Compliance
- Verify all 16 Rule 46 fields are present on your invoice template
- Ensure serial numbers are sequential, within 16 characters, and reset each financial year
- Use correct HSN digits for your turnover tier
- State "Yes" or "No" for reverse charge on every invoice
- Include place of supply with state code for all interstate transactions
- Register on IRP and generate IRN if your AATO exceeds Rs 5 crore
- Issue credit/debit notes with reference to original invoice within the statutory deadline
- Maintain a self-invoice series for unregistered RCM purchases
Source Attribution
This guide is based on Section 31 and Section 34 of the CGST Act, 2017; Rules 46 to 55 of the CGST Rules, 2017; Notification No. 17/2025-CT dated September 30, 2025 (e-invoice threshold revision); and CBIC circulars on HSN reporting requirements. All thresholds and provisions are current as of July 2026.