A tax invoice is the document a GST-registered supplier issues when it makes a taxable supply of goods or services. It records who supplied what to whom, the taxable value and the GST charged, and the buyer needs it to claim input tax credit. Under GST, the obligation to issue it comes from Section 31 of the CGST Act, 2017, and its contents are set out in Rule 46 of the CGST Rules, 2017.

What is a tax invoice?

A tax invoice is proof of a taxable sale. It shows the amount due for payment, including GST, and it is the base document for both the seller's GST liability and the buyer's input tax credit. Tax invoices matter most in business-to-business (B2B) transactions, where the buyer is registered and wants to claim credit for the tax paid.

In simple terms:

Meaning: a GST-compliant bill for a taxable supply.
Issued by: a registered supplier.
Used for: charging and reporting GST, and claiming input tax credit.

What is a Tax Invoice?

Who issues a tax invoice?

A registered supplier of taxable goods or services issues the tax invoice to the buyer.
A registered buyer paying tax under reverse charge on a purchase from an unregistered supplier issues the invoice itself (a self-invoice).
An unregistered person cannot issue a tax invoice or charge GST.
Suppliers of exempt goods or services and composition taxpayers issue a bill of supply instead (see the comparison below).

Mandatory contents of a tax invoice under Rule 46

Rule 46 of the CGST Rules lists what a tax invoice must contain. The main fields are:

Supplier's name, address and GSTIN.
Invoice number: a consecutive serial number of up to 16 characters, using letters, numbers, hyphens or slashes, unique for the financial year. You can run more than one series.
Date of issue.
Recipient's name, address and GSTIN or UIN, if the recipient is registered.
For an unregistered recipient: name, address and delivery address with the state name and code, where the rule requires it for the value of the supply.
HSN code for goods or SAC for services. The number of digits required depends on your turnover.
Description of the goods or services.
Quantity and unit (for goods).
Total value of the supply.
Taxable value, after any discount or abatement.
Rate of tax: central tax, state or union territory tax, integrated tax and cess, as applicable.
Amount of tax charged under each of these.
Place of supply, with the state name, for inter-state supplies.
Delivery address, if it is different from the place of supply.
Whether tax is payable on reverse charge.
Signature or digital signature of the supplier or an authorised representative.

Businesses covered by e-invoicing must also report the invoice to the Invoice Registration Portal (IRP) and print the Invoice Reference Number (IRN) and QR code it returns.

Tax invoice format

A tax invoice can be on paper or electronic, but it must carry all the Rule 46 fields. A typical layout looks like this:

Header

The words "Tax Invoice"
Supplier name, address and GSTIN
Invoice number and date
Recipient name, address and GSTIN
Place of supply (state and code) and delivery address
Whether reverse charge applies: Yes / No

Line items

S. no.	Description	HSN/SAC	Qty	Unit	Rate (₹)	Taxable value (₹)	CGST rate / amount	SGST rate / amount	IGST rate / amount
1	Item or service	Code

Footer

Total taxable value, total tax (in figures and words) and invoice total
Payment terms and bank or UPI details (optional, but useful)
Signature or digital signature of the authorised signatory

For a supply within the same state, charge CGST and SGST (or UTGST). For a supply to another state, charge IGST.

How many copies of a tax invoice are needed?

Under Rule 48 of the CGST Rules:

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".

Where an e-invoice is generated, the rules on physical copies work differently, so follow the e-invoicing requirements.

When must a tax invoice be issued?

Goods: before or at the time of removal of the goods for supply, or their delivery where there is no removal.
Services: within the period prescribed under Rule 47 of the CGST Rules after the service is supplied.

How to prepare a tax invoice

Gather the details. Your business name, address and GSTIN; the customer's name, billing and delivery address and GSTIN; and what was sold, with quantity, unit price, discounts and the HSN or SAC code.
Assign the invoice number. Use the next number in your series for the financial year.
Work out the tax. Decide whether the supply is intra-state (CGST and SGST) or inter-state (IGST), apply the correct rate to the taxable value and add the tax to get the invoice total.
Check reverse charge and place of supply. Mark whether reverse charge applies, and state the place of supply.
Review. Check every Rule 46 field and the arithmetic before you issue it.
Issue and keep a copy. Share the invoice in print or electronically, generate the IRN first if e-invoicing applies to you, and keep your copy for your records and GST returns.

Tax invoice vs bill of supply

	Tax invoice	Bill of supply
Issued for	Taxable supplies	Exempt supplies, or any supply by a composition taxpayer
Who issues it	Registered regular taxpayer	Registered supplier of exempt goods or services, or a composition taxpayer
GST charged	Yes, shown separately	No GST charged
Input tax credit for the buyer	Yes, subject to GST conditions	No
Governing rule	Rule 46, CGST Rules	Rule 49, CGST Rules

If a supplier makes both taxable and exempt supplies to an unregistered buyer, a single "invoice-cum-bill of supply" can be issued.

Tax invoice vs receipt

Is there a difference between a tax invoice and a receipt?

	Tax invoice	Receipt
Purpose	Records a taxable sale and the GST charged	Confirms that payment was received
When	At the time of supply, often before payment	After payment
Legal status under GST	Mandatory for taxable supplies by registered persons	Not a GST document, though often issued as good practice
Contents	All Rule 46 fields: GSTIN, HSN/SAC, taxable value, tax rates and amounts	Date, amount paid, payment method and a short description
Supports input tax credit	Yes	No

Do not confuse a receipt with a receipt voucher, which under GST is issued when a supplier receives an advance payment.

Why tax invoices are important

Proof of the transaction. It records the goods or services, the amount due and the tax charged.
GST compliance. Suppliers use it to report outward supplies and pay the right tax.
Input tax credit. A registered buyer generally needs a valid tax invoice to claim credit for GST paid on purchases, along with the other conditions in GST law, such as the supplier reporting the invoice in its returns.
Legal requirement. A registered supplier must issue it for taxable supplies, and failing to do so can attract penalties.
Record-keeping and audit trail. Invoices support the books, GST returns and audits.
Dispute resolution. It is evidence of what was agreed and supplied.

What tax invoices are used for

For businesses:

Bookkeeping and financial reporting.
Filing GST returns and paying tax.
Claiming input tax credit on purchases.
Supporting sales contracts, with the agreed items, prices and tax.

For individuals:

Claiming business expenses, for example a freelancer's software or equipment purchase.
Proof of purchase for warranties, returns and insurance claims.

Best practices for issuing tax invoices

Include every Rule 46 field and check them before issuing.
Use one standard template for all invoices.
Number invoices sequentially in each series, with no gaps or duplicates in a financial year. This also makes tracking invoices easier.
Issue on time, within the time limits for goods and services.
Keep copies of every invoice for your records, returns and audits.
Review for accuracy, especially GSTINs, HSN or SAC codes, tax rates and totals.
Follow e-invoicing rules if they apply to your business.
Share a copy with the customer promptly, so they can claim credit.

E-invoicing and automation

E-invoicing: businesses covered by the e-invoicing mandate report each B2B invoice to the IRP, which returns an IRN and a signed QR code. The data then flows into the GST system, which reduces manual entry in returns.
Automation: invoicing and accounting software generates, sends and tracks invoices, which cuts manual errors.
ERP integration: invoices sync with accounting and ERP systems, so sales, tax and receivables stay in one record.
Mobile invoicing: small businesses can create and share invoices from a phone.

On the purchase side, OmniCard captures the bill for every business payment by receipt OCR and posts the entry to ERP and accounting systems such as Tally, SAP, Oracle, Zoho and Microsoft Dynamics. See spend management.

Frequently asked questions

What is a tax invoice in GST?

It is the invoice a registered supplier issues for a taxable supply of goods or services. It shows the supplier and recipient details, HSN or SAC code, taxable value and the GST charged, and it lets a registered buyer claim input tax credit.

Who can issue a tax invoice?

Only a person registered under GST who makes a taxable supply. A registered buyer paying tax under reverse charge on a purchase from an unregistered supplier issues a self-invoice.

What is the difference between a tax invoice and a bill of supply?

A tax invoice is issued for taxable supplies and shows GST. A bill of supply is issued for exempt supplies or by a composition taxpayer, and no GST is charged on it, so the buyer cannot claim input tax credit.

What are the rules for a tax invoice number?

It must be a consecutive serial number of up to 16 characters, made of letters, numbers, hyphens or slashes, and unique for the financial year. You can use more than one series, for example one per branch.

Can I claim input tax credit without a tax invoice?

Generally no. A valid tax invoice (or another prescribed document, such as a debit note) is one of the conditions for claiming input tax credit, along with the other conditions in GST law.

Is a receipt the same as a tax invoice?

No. A receipt only confirms that payment was received. It does not carry the GST details a tax invoice must have and cannot be used to claim input tax credit.

Tax Invoice: Meaning, Format and GST Rules (Rule 46)