If you run a service or software business in India and are registered under GST, every invoice you issue has to follow certain rules. Get them wrong and your customers may not be able to claim input tax credit — which makes you harder to buy from.
This is a general overview, not tax advice. Rules change and every business is different — confirm specifics with your chartered accountant.
What a GST tax invoice typically includes
- Your business name, address and GSTIN
- A unique, consecutive invoice number for the financial year
- Invoice date
- Customer name, address and GSTIN (for registered business customers)
- Place of supply (state)
- Description of the service and its SAC code
- Taxable value, tax rate and tax amount — split into CGST/SGST or IGST
- Total amount
- Signature or digital signature
CGST + SGST or IGST?
This depends on where you are and the place of supply:
- Same state (intra-state supply): tax is split into CGST and SGST, usually half each. At 18%, that's 9% CGST + 9% SGST.
- Different state (inter-state supply): the full amount is charged as IGST — 18% IGST.
Getting this split wrong is one of the most common invoicing errors, especially when a business has customers in many states.
SAC codes
Services are classified using SAC (Services Accounting Codes). Each type of service you provide has an applicable code, and it should appear on the invoice. Your CA can confirm the right codes for your services.
Why invoice numbering matters
Invoice numbers should be unique and consecutive within a financial year (April to March). Random numbers or gaps make records hard to reconcile. A common format includes the financial year, for example INV/2026-27/0001, with the counter restarting each year.
When several people or systems create invoices — say, a sales team and an automated billing system — numbering can easily clash or skip unless one system controls the sequence.
Where software helps
Manual invoicing in spreadsheets works for a handful of invoices a month. Beyond that, software reduces errors by:
- Generating the next invoice number automatically, in sequence
- Choosing CGST/SGST or IGST based on the customer's state
- Storing SAC codes against each service
- Keeping every invoice searchable and ready for your accountant
For SaaS businesses
If you sell subscriptions, your billing system should create a compliant invoice for every renewal automatically — including the right tax split for each customer's state. Our own products, AgencyNest and PeopleNest, both issue GST-compliant invoices for this reason.
Building a billing system or SaaS product? Our SaaS development and custom software teams build GST-ready invoicing into the products we create.