How to Make a GST Invoice: Step-by-Step Guide

A GST invoice is more than a receipt. It is the legal document that records a taxable sale, shows how much tax you collected, and lets a registered buyer claim input tax credit. If the invoice is missing a required detail, your buyer can lose that credit and you can face questions during an audit. The good news is that making a correct GST invoice is a routine job once you know the rules. This guide walks through it step by step, using the language of the CGST Act, 2017 and the CGST Rules, 2017, with examples that fit a typical Indian shop.

This is general guidance, not legal or tax advice. GST rules change through notifications, so confirm anything specific to your business with your CA.

Step 1: Check which document you should issue

Before you design a single bill, confirm what kind of document the law expects from you.

Composition dealers are a common source of mistakes. They cannot collect GST from customers, so their bill of supply must not show any CGST or SGST, and it should carry the declaration that the seller is a composition taxable person not eligible to collect tax on supplies.

Step 2: Know when to issue it

Timing is set by Section 31:

• Goods: issue the invoice before or at the time of removal of goods for supply, or at the time of delivery where removal is not involved. For a shop counter sale, that simply means at the time of billing.
• Services: issue the invoice within 30 days of supplying the service (Rule 47). A salon, repair shop or laundry usually bills on completion, which is well within the limit.

For small retail sales, Rule 46 has a useful relief. If a single sale is below ₹200, the buyer is unregistered, and the buyer does not ask for an invoice, you may skip the individual invoice. You must then issue one consolidated tax invoice covering all such sales at the end of the day. In practice most shops print a bill for every sale anyway, because it also serves as the customer’s receipt.

Step 3: Set up your invoice numbering

Rule 46(b) asks for a consecutive serial number of up to 16 characters, unique for the financial year. You may use letters, numbers, hyphens and slashes, and you may keep separate series (for example, one per counter or per branch).

A sensible format looks like this:

• KA1/26-27/0001: a counter code, the financial year and a running number.
• INV-0458: a simple prefix and number.

Two things to avoid: gaps or duplicates in the series, and numbers longer than 16 characters once the year tag is added. Many shops restart numbering on 1 April each year, which keeps every number unique within the financial year.

In PaisaBill you set this once under the tax and billing settings: prefix, separator (hyphen, slash or none), 4 to 7 digits, a starting number, an optional suffix, an optional financial-year tag such as ABC/26-27/0001, and an option to restart the count each financial year.

Step 4: Fill in the mandatory details

Rule 46 lists the particulars a tax invoice must contain. For a typical shop, they come down to the following. The GST invoice format guide explains each field in more detail.

1. Your name, address and GSTIN.
2. The invoice number and date.
3. The buyer’s name, address and GSTIN, if the buyer is registered.
4. For an unregistered buyer, the name and address of the buyer and the delivery address with state name and code, but only where the taxable value is ₹50,000 or more (Rule 46(e)).
5. HSN code for goods or SAC for services.
6. Description, quantity and unit of each item.
7. Total value, and taxable value after any discount.
8. Rate and amount of tax: CGST and SGST, or IGST.
9. Place of supply with the state name, for inter-state supplies.
10. Whether tax is payable on reverse charge.
11. Signature or digital signature of the supplier or an authorised person.

How many HSN digits?

Under Notification 78/2020-Central Tax, the number of HSN digits depends on your aggregate turnover in the previous financial year:

Even where it is optional, printing HSN on B2C bills is a good habit. It makes your GST summary easier to reconcile and helps if a customer later asks for a proper tax invoice.

Step 5: Work out the tax correctly

The place of supply decides which tax heads apply.

• Intra-state sale (buyer in the same state as you): charge CGST and SGST, each at half the GST rate. An item at 18% GST carries 9% CGST and 9% SGST.
• Inter-state sale (buyer in another state): charge IGST at the full rate.
• Union territories without a legislature: UTGST replaces SGST.

For a walk-in customer at your counter, the place of supply for goods is your own location, so the sale is intra-state and you charge CGST plus SGST.

Tax-inclusive or tax-exclusive prices

Most kirana and retail shops display prices that already include GST. In that case the tax is carved out of the price:

Price including 18% GST:  ₹118.00
Taxable value:            118 / 1.18 = ₹100.00
CGST @ 9%:                ₹9.00
SGST @ 9%:                ₹9.00

If your prices exclude GST, the tax is added on top. A worked example for a bill with mixed rates:

Grand total: ₹610.00. If you round off, show the round-off amount as a separate line so the arithmetic is visible.

Discounts

Rule 46 asks for the taxable value “taking into account discount”. A discount given on the bill itself reduces the taxable value, so calculate GST after the discount, not before.

Step 6: Add the finishing details

Several details are not strictly required on every bill but make your invoice clearer and more useful:

• Tax breakup table: a small summary of taxable value, CGST and SGST grouped by rate. Buyers and accountants read this first.
• Amount in words: customary on Indian invoices and helpful against tampering.
• Payment mode: cash, UPI, card or a split.
• UPI QR code: lets the customer pay the exact amount by scanning. Note that the dynamic QR code requirement for B2C invoices applies only to businesses with aggregate turnover above ₹500 crore, so for most shops a payment QR is a convenience, not a legal field.
• FSSAI licence number: required for food businesses on bills and receipts under FSSAI rules.

Step 7: Make the right number of copies

Rule 48 sets how many copies of a tax invoice you prepare:

• Goods: three copies, marked ORIGINAL FOR RECIPIENT, DUPLICATE FOR TRANSPORTER and TRIPLICATE FOR SUPPLIER.
• Services: two copies, marked ORIGINAL FOR RECIPIENT and DUPLICATE FOR SUPPLIER.

For a counter sale where the customer carries the goods away, shops typically give the customer the printed bill and keep a digital record. A billing system that stores every bill and never deletes it makes the supplier’s copy easy to produce later.

Step 8: Know when e-invoicing applies

E-invoicing (generating an IRN on the government Invoice Registration Portal) is mandatory for B2B invoices when your aggregate turnover in any financial year since 2017-18 has exceeded ₹5 crore. It does not apply to B2C sales. If you cross this limit, your B2B invoices must be reported to the IRP, usually through accounting software or a GST Suvidha Provider. Small shops below the limit do not need it.

B2B sales and inter-state invoices

When a registered business buys from you and wants to claim input tax credit, the invoice must carry the buyer’s GSTIN, and for an inter-state sale it must show IGST and the place of supply. Getting these right matters, because the buyer’s credit depends on them.

PaisaBill is built for fast counter billing and currently prints CGST plus SGST bills for in-state sales. For the occasional inter-state B2B tax invoice that needs IGST, the buyer’s GSTIN and place of supply, prepare it in your accounting software or ask your CA, and keep using PaisaBill for daily counter sales.

Making GST invoices quickly at the counter

Writing all this by hand is slow and error-prone. A billing app does the arithmetic and prints the required details every time. In PaisaBill you enter your GSTIN, legal name and FSSAI or CIN once (your state is detected from the GSTIN), give each product its HSN code and GST rate, and choose whether prices include tax. Every bill then prints with the HSN column, CGST and SGST breakup, a tax breakup table, the amount in words and, if you add your UPI ID, a UPI QR with the exact amount and bill number. You can print to a 58mm or 80mm thermal printer or share an A4 or A5 PDF using the “GST Tax Invoice” template. The GST summary report, exportable as CSV or PDF, gives your CA the rate-wise taxable value and tax collected for the period.

If you need help connecting a printer, read the thermal printer setup guide. To see everything the app does, visit the features page.

Start billing

PaisaBill is free and runs on an Android phone, a Windows PC or any browser. Download PaisaBill and print your first GST invoice in a few minutes.