Guide · 11 min read · Updated May 2026

What is GST Invoicing in India? Complete 2026 Guide for Businesses

TL;DR

GST invoicing is the legal process of issuing tax-compliant invoices under India's Goods and Services Tax. Every registered business must issue invoices with a GSTIN, HSN/SAC code, correct CGST/SGST or IGST split, and a unique serial number. Businesses with turnover above ₹5 crore must additionally generate e-invoices via the government IRP portal and receive a QR-coded IRN.

Definition

GST invoicing refers to issuing tax-compliant invoices under the Central Goods and Services Tax Act, 2017 and the corresponding State GST Acts. Any business registered for GST in India (with a GSTIN) is legally required to issue a GST invoice for every taxable supply of goods or services to a buyer, with strict rules around mandatory fields, numbering, timing, and (above a threshold) electronic reporting.

A GST invoice is the primary document that establishes input tax credit (ITC) eligibility for the buyer. Get the invoice wrong and the buyer cannot claim ITC — which is why B2B customers refuse to accept malformed invoices.

GSTIN format breakdown

A GSTIN is a 15-character alphanumeric identifier. Each segment carries meaning:

09 ABCDE1234F 1 Z 5

· 09 — State code (09 = Uttar Pradesh)
· ABCDE1234F — PAN of the registered entity
· 1 — Entity code (for multiple registrations under same PAN)
· Z — Default alphabet
· 5 — Checksum digit

Intrastate vs interstate — CGST/SGST vs IGST

GST is collected by both the Centre and the States, so the split on every invoice depends on the place of supply:

Intrastate (buyer + seller same state)

Tax is split equally between Centre and State.

18% sale → 9% CGST + 9% SGST

Interstate (different states)

Single integrated tax collected by Centre, later distributed.

18% sale → 18% IGST

Invoice numbering rules

· Unique and sequential within a financial year.
· Maximum 16 characters.
· Allowed characters: alphabets, numerals, hyphen, slash.
· No gaps. No reuse. No going backwards.
· A common convention: INV/26-27/0001, INV/26-27/0002, …
· You may use multiple invoice series (e.g. for different branches) as long as each is itself unique and sequential.

Mandatory fields on every GST invoice

· Supplier name, address, GSTIN.
· Recipient name, address, GSTIN (if registered).
· Invoice number and date.
· HSN code (goods) or SAC code (services).
· Description, quantity, unit, total taxable value.
· CGST/SGST or IGST rate and amount (separately).
· Place of supply (state name and code).
· Reverse charge indicator (yes/no).
· Signature (physical or digital).

E-invoicing — the IRP, IRN, and QR code

For businesses above the e-invoicing threshold (currently ₹5 crore aggregate turnover), invoices must be uploaded to the government's Invoice Registration Portal (IRP) in real time. The IRP returns:

· IRN — a unique 64-character Invoice Reference Number.
· Signed JSON — digitally signed invoice payload.
· QR code — must be printed on the invoice.

Only invoices with a valid IRN are recognised; non-e-invoiced invoices above the threshold are legally invalid and disallow the buyer's ITC. Most accounting software (Tally, Zoho Books, ClearTax, custom ERPs) integrates with the IRP via API.

Software vs manual invoicing

Manual invoicing (Excel, Word, PDF templates) works for very small businesses but breaks down at scale. Software-based options:

· Off-the-shelf: Tally Prime, Zoho Books, ClearTax, Vyapar, myBillBook — ₹500-3000/month, fast to start.
· Payment gateway native: Razorpay Invoices, Cashfree — tightly coupled with payment collection.
· Custom-built: Laravel / Next.js ERPs with embedded GST logic — right call when invoicing is part of a larger product (CRM, marketplace, SaaS). See our custom CRM development guide.

Integration with payment gateways

For e-commerce and SaaS businesses, GST invoicing is normally chained to payment collection. Razorpay, Cashfree, and PayU expose Invoice APIs that generate compliant GST invoices on every successful payment, attach them to the customer's email, and webhook the data into your books. This eliminates the manual reconciliation step but does not remove your legal obligation to verify the data.

Common questions about GST invoicing

What is the difference between CGST, SGST, and IGST?

CGST (Central GST) and SGST (State GST) are levied together on intrastate supplies — when the buyer and seller are in the same state. IGST (Integrated GST) is levied on interstate supplies. The total tax rate is the same in both cases; only the split changes. Example: an 18% sale from Noida to Noida is 9% CGST + 9% SGST; the same sale from Noida to Mumbai is 18% IGST.

What is a GSTIN and how is it formatted?

GSTIN (Goods and Services Tax Identification Number) is a 15-character alphanumeric ID issued to every registered business. Format: first 2 digits = state code, next 10 = PAN of the entity, 13th = entity code (for multiple registrations under the same PAN), 14th = 'Z' by default, 15th = checksum. Example: 09ABCDE1234F1Z5.

When is e-invoicing mandatory in India?

As of 2026, e-invoicing is mandatory for any registered business with aggregate turnover above ₹5 crore in any financial year since 2017-18. Below ₹5 crore, e-invoicing is optional. The threshold has progressively dropped (₹500cr → ₹100cr → ₹50cr → ₹20cr → ₹10cr → ₹5cr) and is widely expected to drop further.

What are the mandatory fields on a GST invoice?

Supplier name, address, GSTIN; recipient name, address, GSTIN (if registered); invoice number (unique, sequential, max 16 chars); invoice date; HSN code (goods) or SAC code (services); description, quantity, unit; taxable value; CGST/SGST/IGST rate and amount; place of supply; reverse charge indicator (if applicable); signature or digital signature.

Can I use my own invoice numbering format?

Yes, with rules. Invoice numbers must be unique and sequential within a financial year, contain only letters/numbers/hyphen/slash, and not exceed 16 characters. You can have a prefix like INV/24-25/0001. You cannot reuse numbers or have gaps — auditors flag both.

Does Razorpay generate GST invoices automatically?

Razorpay can generate GST-compliant invoices via its Invoices product and pass the data into your accounting system via webhooks. However, the legal liability for invoice correctness stays with the merchant. Most production setups have Razorpay handle payment + invoice creation, then push to Tally / Zoho Books / a custom ERP for the books of accounts.

Do I need GST invoicing for B2C sales below ₹200?

Below ₹200 per transaction, you can issue a consolidated invoice at end of day for B2C unregistered sales (provided you are not required to issue a tax invoice per the recipient's request). Above ₹200 you must issue a regular GST invoice. E-commerce operators have additional reporting rules under section 9(5).