Tax Invoice

A Tax Invoice is the primary commercial and legal document issued by a GST-registered supplier when making a taxable supply of goods or services. It is more than just a payment request — it is a legal record of the transaction, the basis for the supplier's GST liability, and the document that enables the recipient to claim Input Tax Credit (ITC).

Tax invoices are governed by Section 31 of the CGST Act, 2017 and Rule 46 of the CGST Rules, 2017.

When Must a Tax Invoice Be Issued?

The timing for issuing a tax invoice depends on the nature of the supply:

For goods: The tax invoice must be issued at or before the time of removal (for goods involving movement) or at the time of delivery (for goods not involving movement).

For services: The tax invoice must be issued within 30 days of the date of supply of service. For banking and financial institutions, the limit is 45 days.

For continuous supply of services (such as telecom or subscription services): The invoice must be issued on or before the due date of payment as per the contract, or before or at the time of receipt of payment, whichever is earlier.

Mandatory Fields on a Tax Invoice

As per Rule 46 of the CGST Rules, every tax invoice must contain the following details:

• Name, address, and GSTIN of the supplier
• A consecutive serial number, unique within a financial year
• Date of issue
• Name and address of the recipient
• GSTIN of the recipient (mandatory for B2B supplies)
• HSN code for goods or SAC code for services
• Description of goods or services
• Quantity and unit of goods (or nature of services)
• Total taxable value after discounts
• Applicable GST rate and tax amount (CGST + SGST for intra-state, or IGST for inter-state)
• Place of supply with state name and code
• Whether tax is payable under Reverse Charge Mechanism
• Signature or digital signature of the supplier or authorised representative

Tax Invoice vs. Bill of Supply

A tax invoice is not the only invoice document under GST. A bill of supply is issued instead of a tax invoice when:

• The supplier is registered under the Composition Scheme
• The supply is fully exempt

Unlike a tax invoice, a bill of supply does not carry GST charges and cannot be used by the recipient to claim ITC.

Number of Copies Required

For goods, a tax invoice must be prepared in three copies:

The original is for the recipient. The duplicate is for the transporter. The triplicate is retained by the supplier.

For services, only two copies are required — original for the recipient and duplicate for the supplier.

Tax Invoice for Exports

When exporting goods or services under the LUT route, the tax invoice must carry the declaration: "Supply meant for export under LUT without payment of Integrated Tax."

When exporting with IGST payment, the invoice must state: "Supply meant for export on payment of Integrated Tax."

For export of services, the invoice may be in foreign currency and should reference the applicable FEMA compliance details.

Revised Tax Invoice and Credit/Debit Notes

If an error is discovered after issuing a tax invoice, the supplier can issue a Revised Tax Invoice (applicable only for the period between GST registration and the date of grant of registration). For post-supply adjustments, a credit note (to reduce value) or a debit note (to increase value) is issued instead.

E-Invoicing

For businesses with annual turnover above ₹5 crore, the government mandates e-invoicing — where every tax invoice must be registered on the Invoice Registration Portal (IRP) and assigned a unique IRN (Invoice Reference Number) and a QR code before it is issued to the recipient. E-invoicing ensures real-time reporting of B2B transactions to the GST system.

Tax Invoice and ITC

The tax invoice is the gateway document for the recipient's ITC claim. A recipient can claim ITC only if they hold a valid tax invoice from a registered supplier, the invoice appears in their GSTR-2B, and payment is made to the supplier within 180 days of the invoice date.

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