Invoice

An invoice is a formal commercial document issued by a seller (supplier) to a buyer (recipient) that details the goods delivered or services rendered, the agreed prices, applicable taxes, and the total amount due for payment. It serves simultaneously as a payment request, a legal record of the transaction, and a tax document when GST is involved.

In India, invoices are governed by the CGST Act, 2017 (for GST-registered businesses) and general commercial law for non-GST transactions.

Types of Invoices in India

Tax Invoice

A tax invoice is issued by a GST-registered supplier for taxable supplies of goods or services. It is the most common invoice type in B2B transactions and allows the recipient to claim Input Tax Credit (ITC). It must include the supplier's GSTIN, HSN/SAC code, and the applicable GST breakup (CGST + SGST or IGST).

Bill of Supply

A bill of supply is issued instead of a tax invoice when a GST-registered supplier makes an exempt supply or is registered under the Composition Scheme. No GST is charged on a bill of supply.

Proforma Invoice

A proforma invoice is a preliminary document sent to the buyer before the actual supply takes place. It is not a demand for payment — it outlines the expected cost of goods or services and is commonly used for import/export transactions or advance payment requests.

Export Invoice

An export invoice is issued for goods or services supplied to a recipient outside India. For export of services, the invoice is typically issued in foreign currency and references the LUT number (or states that IGST has been paid).

Freelancer Invoice

A freelancer invoice is issued by a self-employed professional or freelancer for services rendered. It may or may not include GST depending on whether the freelancer is registered.

Credit Note and Debit Note

A credit note is issued when the supplier needs to reduce the value of a previously issued invoice (e.g., returns, discounts). A debit note is issued when the supplier needs to increase the value of a previously issued invoice.

Mandatory Fields on a GST Tax Invoice

As per Rule 46 of the CGST Rules, 2017, a tax invoice must include:

Name, address, and GSTIN of the supplier
A consecutive serial number unique to the financial year
Date of issue
Name, address, and GSTIN of the recipient (for B2B supplies)
HSN code (for goods) or SAC code (for services)
Description, quantity, and unit of goods or nature of services
Total taxable value after adjusting for discounts
Applicable GST rate and tax amount (CGST + SGST for intra-state; IGST for inter-state)
Place of supply
Whether tax is payable under reverse charge
Signature or digital signature of the supplier

Invoice Numbering

Invoices must carry a unique, consecutive serial number for each financial year. A common format used by Indian businesses is INV/2026/001, but any logical sequential system is acceptable as long as it does not repeat within a financial year.

Payment Terms on an Invoice

An invoice should clearly state the payment terms — including the due date and any applicable late payment fee for overdue amounts. Common terms include Net 30 (payment due in 30 days) or immediate payment upon receipt.

Invoice vs. Receipt

An invoice is a request for payment issued before or at the time of supply. A receipt is an acknowledgement of payment received issued after the buyer has paid. Confusing the two is a common mistake in small businesses.

E-Invoicing Under GST

For businesses with annual turnover above ₹5 crore, the government mandates e-invoicing — where invoices are registered on the Invoice Registration Portal (IRP) and assigned a unique Invoice Reference Number (IRN) and QR code. JetInvoice is designed for businesses below this threshold that do not require mandatory e-invoicing.

Create professional GST-compliant invoices in under 2 minutes with JetInvoice's free invoice generator — with auto CGST/SGST calculation, HSN/SAC code search, and WhatsApp sharing built in.