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What is GST (Goods and Services Tax)?
GST is a destination-based, multi-stage, comprehensive indirect tax levied on every value addition in the supply chain of goods and services. It is collected at each stage of production and distribution, but the final tax burden falls only on the end consumer — businesses in between can recover the tax they pay as Input Tax Credit (ITC), eliminating the cascading "tax on tax" that existed before 2017.
India follows a dual GST structure: for transactions within a state (intra-state), both the Central Government (CGST) and the State Government (SGST) collect their equal share simultaneously. For transactions crossing state borders (inter-state), the Central Government collects IGST and distributes the state's share to the destination state. This ensures tax revenue goes where goods or services are consumed — not where they are manufactured.
The Three Components of Indian GST
Collected by the Central Government on intra-state supply. Governed by the CGST Act, 2017. The CGST rate is always equal to the SGST rate — both together make up the total GST rate.
Collected by the State Government on intra-state supply. Union Territories without legislature collect UTGST instead of SGST. Governed by respective State GST Acts.
Collected by the Central Government on inter-state supply, exports, imports, and SEZ transactions. Governed by the IGST Act, 2017. The Centre distributes the state's portion to the destination state.
GST Tax Slabs in India (2025–26)
The GST Council periodically revises rates. Current slabs applicable to most goods and services:
| GST Rate | Category | Common Examples |
|---|---|---|
| 0% (Exempt) | Essential goods and services | Fresh fruits, vegetables, milk, eggs, unbranded cereals, books, newspapers, healthcare, education |
| 0.25% | Rough precious stones | Rough diamonds, semi-precious stones |
| 3% | Precious metals and jewellery | Gold, silver, platinum jewellery, coins of precious metals |
| 5% | Mass consumption essentials | Branded cereals, edible oils, sugar, tea, coffee, coal, footwear under ₹1,000, household LPG |
| 12% | Processed foods and standard goods | Butter, cheese, fruit juices, packed foods, mobile phones, tractors, medicines, business-class air travel |
| 18% | Most goods and services (standard rate) | IT services, software, financial services, restaurants, consumer electronics, paints, cement, hair salons |
| 28% | Luxury and demerit goods | Cars, motorcycles, aerated drinks, tobacco, luxury hotels, cinema, washing machines, air conditioners |
| 28% + Cess | High-end luxury / sin goods | SUVs, pan masala, gutkha, cigarettes — additional Cess on top of 28% GST |
Source: GST Council — gst.gov.in | CBIC — cbic-gst.gov.in
Who Must Register for GST?
- Businesses with annual aggregate turnover exceeding ₹40 lakhs (goods) or ₹20 lakhs (services) — ₹10 lakhs for North-Eastern and special category states
- Any business making inter-state supply of goods or services, regardless of turnover
- E-commerce operators and sellers on e-commerce platforms
- Persons liable to pay tax under Reverse Charge Mechanism (RCM)
- Casual taxable persons and non-resident taxable persons
Register online at the official GST portal: gst.gov.in ↗
How to Create a GST Tax Invoice — Step-by-Step Guide
Step 1 — Enter Your Business (Supplier) Details
Fill in your legal business name exactly as registered with GST authorities, your GSTIN (15-digit GST Identification Number), and registered address. Your GSTIN format is: [2-digit state code][5-char PAN entity][4-digit sequence][entity type][Z][checksum] — e.g., 27AABCT1234C1ZP (27 = Maharashtra). This tool validates your GSTIN in real time and auto-detects your state from the first 2 digits.
Step 2 — Select the Correct Invoice Type
Choosing the right invoice type determines the heading, tax calculation, and legal declarations on your invoice:
- B2B Tax Invoice — For GST-registered buyers. Buyer GSTIN is mandatory. Buyer can claim Input Tax Credit (ITC).
- B2C Invoice — For unregistered individual consumers. Buyer GSTIN not required.
- Export Invoice — For supply to buyers outside India. Always IGST (zero-rated under LUT or with IGST payment for refund). LUT/Bond number field appears automatically.
- SEZ Invoice — For supply to Special Economic Zone units. Always IGST irrespective of supplier location. SEZ declaration is printed on the invoice.
- Bill of Supply — For composition dealers or exempt/nil-rated supplies. No GST charged; heading changes to "BILL OF SUPPLY"; tax columns are hidden.
- RCM Invoice — When Reverse Charge Mechanism applies. Reverse charge field auto-sets to "Yes" and "REVERSE CHARGE: YES" banner appears on the invoice.
Step 3 — Enter Buyer Details and Set Place of Supply
The Place of Supply is the single most critical field for GST compliance. It is defined in Sections 10–13 of the IGST Act, 2017 — and is not necessarily the delivery address or billing address. The rule: if supplier state = Place of Supply → CGST + SGST. If different → IGST. This tool shows a real-time color-coded banner at the top whenever this changes.
Step 4 — Add Line Items with HSN/SAC Codes
For each item enter description, HSN code (goods) or SAC code (services), quantity, unit, and rate. GST is applied per line — the legally correct method per GSTN guidelines. Rounding on the total instead of per line is one of the six most common ITC rejection causes. HSN/SAC digit requirement: up to ₹5 crore turnover → 4-digit; above ₹5 crore → 6-digit on all invoices.
Step 5 — Review Totals and Amount in Words
The tool auto-calculates Total Taxable Value, CGST + SGST (or IGST), and Grand Total. The Amount in Words is auto-generated in the Indian number system (lakhs, crores with paise) — this is mandatory on every GST Tax Invoice under Rule 46.
Step 6 — Add Bank Details and Signature
Bank details speed up payment collection. The authorised signatory section fulfils the Rule 46 requirement for a signature. The invoice footer shows "This is a Computer Generated Invoice" — required for digitally generated invoices.
Step 7 — Preview and Download PDF
Click Preview to review the complete invoice. Then click Download PDF for a professional A4 GST invoice with all Rule 46 mandatory fields. For businesses with turnover above ₹5 crore, upload the invoice data to einvoice1.gst.gov.in to generate the IRN and QR code before sending to the buyer.
6 Most Common GST Invoice Mistakes That Cause ITC Rejection
| # | Mistake | Consequence | How This Tool Helps |
|---|---|---|---|
| 1 | Wrong buyer GSTIN (even 1 digit wrong) | Buyer cannot claim ITC; mismatch in GSTR-2B | Real-time GSTIN format validation with auto state detection |
| 2 | Missing HSN/SAC codes | GSTR-1 filing rejected; ITC disallowed | Dedicated HSN/SAC field per line item; search link provided |
| 3 | Wrong Place of Supply → wrong tax type | ITC cannot be adjusted; demand raised for correct tax | Auto-detects intra/inter state; color-coded alert banner |
| 4 | Non-sequential invoice numbers | Audit flag; penalty under Section 122 | Invoice number field with financial year prefix guidance |
| 5 | Rounding GST on grand total instead of per line | Reconciliation errors in GSTR-1 | GST calculated individually per line item |
| 6 | Missing "Reverse Charge: Yes" on RCM invoices | Recipient compliance issues; penalty | RCM type auto-sets reverse charge field and prints on invoice |
GST Tax Invoice vs Proforma Invoice vs Quotation vs Delivery Challan — Full Comparison
These business documents are frequently confused but serve entirely different legal and commercial purposes. Using the wrong document can cause compliance issues, ITC rejections, and penalties.
| Feature | GST Tax Invoice | Proforma Invoice | Quotation / Quote | Bill of Supply | Delivery Challan |
|---|---|---|---|---|---|
| Legal Status | Legally binding — payment demand | Not binding until accepted | Offer of price only | Legally valid — no ITC | Movement document only |
| When Issued | After goods delivered / service rendered | Before confirmed sale, for customs or advance payment | Before order — sales stage only | For exempt or composition supplies | When goods are moved without a sale |
| GST Charged | Yes — CGST+SGST or IGST | No (estimate only) | No (price offer only) | No (exempt/nil-rated) | No (movement document) |
| ITC Eligible | Yes — buyer can claim ITC | No | No | No | No |
| GSTIN Required | Yes (supplier); mandatory for buyer in B2B | Optional | Optional | Yes (supplier) | Yes (supplier) |
| Accounting Entry | Yes — creates accounts receivable | No entry | No entry | Yes — revenue without GST | No — inventory movement only |
| Used in Export Trade | Yes — with IGST or LUT bond | Yes — most common for customs | Sometimes as price reference | For exempt export supplies | Yes — goods in transit docs |
| Required Heading | "TAX INVOICE" | "PROFORMA INVOICE" | "QUOTATION" | "BILL OF SUPPLY" | "DELIVERY CHALLAN" |
| GSTR-1 Reporting | Mandatory | Not required | Not required | Mandatory | Not required |
Which Document Should I Use?
- Use a Quotation when a prospect asks for your price before placing an order. No GST implications. Free Quotation Generator ↗
- Use a Proforma Invoice when the buyer needs a document for advance payment, letter of credit, or customs pre-clearance before the actual supply happens. Free Proforma Invoice Generator ↗
- Use a GST Tax Invoice after completing the supply of goods or services. This is the only document the buyer can use to claim ITC. Must comply with Rule 46 of the CGST Rules, 2017.
- Use a Bill of Supply if you are a composition dealer, or if the supply is exempt or nil-rated under GST. Select "Bill of Supply" in the invoice type selector above.
- Use a Delivery Challan when goods are being moved without a sale — for job work, exhibition, branch transfer, or returns. A Tax Invoice is issued separately at the time of actual supply.
Official GST Portals, Laws & Government References
This GST Invoice Generator is built to comply with the following official Indian government laws and portals. These are the authoritative sources for all GST rules, rates, and procedures:
Official portal for GST registration, return filing, payments, and e-invoicing. All registered taxpayers must use this portal.
gst.gov.in ↗
Central Board of Indirect Taxes and Customs. Find the complete CGST Act, IGST Act, CGST Rules, IGST Rules, and all GST notifications and circulars.
cbic-gst.gov.in ↗
Mandatory for businesses with aggregate turnover ₹5 crore+. Generate IRN (Invoice Reference Number) and QR code for B2B invoices before sending to buyer.
einvoice1.gst.gov.in ↗
Find the correct HSN code for goods or SAC code for services. Maintained by GSTN — free to search without login.
services.gst.gov.in ↗
Verify any GSTIN before accepting an invoice. Confirms registration status, legal name, state, and whether the taxpayer is active or cancelled.
Verify GSTIN ↗
Generate e-Way Bills for movement of goods valued above ₹50,000. Required alongside your Tax Invoice for goods in transit under Rule 138 of CGST Rules.
ewaybillgst.gov.in ↗
Legal Provisions This Tool Complies With
| Legal Provision | What It Requires | How This Tool Implements It |
|---|---|---|
| Section 31, CGST Act 2017 | Every registered supplier must issue a Tax Invoice for taxable supplies; within 30 days for services, on/before delivery for goods | Generates compliant TAX INVOICE or BILL OF SUPPLY with all required fields |
| Rule 46, CGST Rules 2017 | Prescribes all 21 mandatory fields every GST Tax Invoice must contain | All 21 fields present: GSTIN, invoice no. (max 16 chars), date, place of supply, HSN/SAC, tax per line, amount in words, signature |
| Sections 10–13, IGST Act 2017 | Defines Place of Supply for goods and services — determines CGST+SGST vs IGST | Place of Supply dropdown with all 37 states/UTs; real-time auto-detection of tax type with color-coded banner |
| Section 122, CGST Act 2017 | Penalty of ₹10,000 or tax evaded (whichever higher) for incorrect or missing invoices | GSTIN validator, invoice number guidance (max 16 chars), compliance disclaimer shown prominently |
| Rule 138, CGST Rules 2017 | e-Way Bill required for movement of goods exceeding ₹50,000 | e-Way Bill number field included on invoice form and printed on invoice |
| Notification 13/2020-CT | e-Invoicing (IRN + QR code) mandatory for B2B supplies above specified annual turnover (₹5 crore as of 2025) | Compliance note advising businesses above threshold to register on einvoice1.gst.gov.in; IRN reference field available |
Free GST Invoice Generator — Features & FAQ
Detects intra vs inter-state from Place of Supply. Splits tax correctly per line — the legally required method.
B2B, B2C, Export, SEZ, Bill of Supply, RCM — each with type-specific fields, headings, and legal declarations.
Mandatory on GST invoices — auto-generated in Indian system (lakhs, crores) with paise.
Complete list with correct state codes for accurate Place of Supply determination.
Real-time 15-char format check; auto-reads state code from GSTIN and sets Supplier State dropdown.
A4 PDF with all 21 Rule 46 mandatory fields, per-line tax table, amount in words, bank details, signature.
Frequently Asked Questions
When supplier and buyer are in the same state (intra-state), GST is split equally into CGST (Central) and SGST (State). For example, 18% GST = 9% CGST + 9% SGST. When they are in different states (inter-state), IGST at the full rate applies. For exports and SEZ supplies, IGST applies irrespective of supplier state. The determination is based on Place of Supply as defined in the IGST Act — not the delivery address.
Rule 46 of CGST Rules mandates: "TAX INVOICE" heading, supplier name/address/GSTIN, unique sequential invoice number (max 16 chars), invoice date, buyer name/address/GSTIN (B2B), place of supply with state code, HSN/SAC per line, description, quantity, unit, taxable value per line, GST rate per line, CGST+SGST or IGST amounts per line, total value, reverse charge indicator (Yes/No), amount in words, and supplier's authorised signature or digital signature.
Use CGST+SGST when the supplier's state and Place of Supply are the same state. Use IGST for different states, SEZ supplies, exports, and imports. A common error is using the buyer's delivery address instead of the legally defined Place of Supply — this causes ITC rejection. This tool auto-detects the correct tax type and shows a color-coded banner in real time.
Invoice serial number must be unique, consecutive within a financial year (April to March), and must not exceed 16 characters. Allowed characters: alphanumeric plus dash (-) and slash (/) only. Recommended format: INV/2025-26/001 or TSP/FY26/0042. Non-sequential or duplicate invoice numbers trigger audit flags in GSTR-1 and can attract penalties under Section 122 of the CGST Act.
Yes, completely free. No registration, no subscription, no watermarks, no hidden fees. All data stays in your browser — nothing is uploaded to any server. Create unlimited GST invoices and download professional A4 PDFs forever at ThinkForU.org.
A Bill of Supply is issued instead of a Tax Invoice when GST cannot be charged — for composition scheme dealers, exempt supplies, or nil-rated goods/services. It must say "Bill of Supply" not "Tax Invoice". No GST is shown; the buyer cannot claim ITC. Select "Bill of Supply" in the invoice type buttons above and this tool automatically adjusts the heading and removes tax columns.
Under RCM, the tax liability shifts from the supplier to the recipient. The buyer pays GST directly to the government. RCM applies to specific notified goods/services (legal services, GTA, import of services) and when a GST-registered business buys from an unregistered supplier above threshold. The invoice must state "Reverse Charge: Yes". Select "RCM Invoice" above for the correct format.
HSN (Harmonized System of Nomenclature) codes classify goods; SAC (Services Accounting Code) codes classify services. Mandatory on all invoices: businesses with turnover up to ₹5 crore use 4-digit codes on B2B invoices; above ₹5 crore requires 6-digit codes on all invoices. Search the correct code free at services.gst.gov.in.
As of 2025, e-Invoicing is mandatory for businesses with aggregate annual turnover of ₹5 crore or more for all B2B transactions. It requires uploading invoice data to the Invoice Registration Portal (IRP) at einvoice1.gst.gov.in to generate a 64-character IRN and QR code. This tool generates a compliant draft invoice but does not directly integrate with IRP — businesses above the threshold must upload the invoice data to einvoice1.gst.gov.in to get the IRN and QR code before sending to the buyer.
Under Section 122(1)(i) of the CGST Act, 2017, the penalty for not issuing or issuing an incorrect invoice is ₹10,000 per invoice or the tax amount involved, whichever is higher. This applies separately under CGST and SGST, potentially doubling the liability. Issuing fake invoices (without actual supply) attracts prosecution and imprisonment of up to 5 years under Section 132 of the CGST Act.