Invoice Requirements in India: Legal Rules for 2026

TL;DR: Indian GST invoices require GSTIN, HSN/SAC codes, and tax breakdowns at the correct slab (5%, 12%, 18%, or 28% plus cess). E-invoicing with IRN through the IRP is mandatory for businesses above specified turnover thresholds and expanding to smaller taxpayers.

India’s Goods and Services Tax (GST) regime expects tax invoices to carry a dense set of identifiers so input tax credit (ITC) chains stay defensible. E-invoicing with Invoice Reference Numbers (IRN) applies to many larger taxpayers and continues to expand by turnover thresholds—if you are in scope, a plain PDF without a valid QR code and IRN may be rejected by enterprise AP teams. B2C supplies generally sit outside e-invoice IRN requirements but still need sound tax invoices for your records and customer trust. This article outlines 2026-oriented practice for mainstream B2B; it is not legal advice. Validate composition scheme, SEZ, exports, RCM, and e-way bill intersections with your CA and current CBIC notifications.

Required fields

A compliant tax invoice typically includes: supplier legal name, address, and GSTIN; invoice number and date; recipient legal name, address, and GSTIN (where required); HSN/SAC codes; description, quantity, taxable value; rate and amount of CGST/SGST/UTGST or IGST as applicable; place of supply; and reverse charge declarations when RCM applies. Credit and debit notes must reference the original invoice and preserve tax segregation. Where e-invoicing applies, generation through the Invoice Registration Portal (IRP) is part of issuance, not an afterthought. Post-IRN corrections normally flow through credit or debit notes rather than silent PDF edits—plan document control with your finance and IT teams.

Tax rules (VAT/GST/sales tax rates)

GST uses multiple slabs commonly cited as 5%, 12%, 18%, and 28% (with cess on selected goods such as some automobiles and tobacco). Zero-rated exports and SEZ supplies need correct LUT/bond documentation and invoice wording aligned to your filing position. Exempt and nil-rated supplies must not be presented as if standard GST applies. Intra-state vs inter-state determines CGST+SGST/UTGST versus IGST—errors here are a frequent ITC dispute trigger. Place-of-supply rules for services (including SaaS and professional engagements) should appear in footnotes or line notes when contracts involve multiple states or overseas beneficiaries.

Language requirements

English is widely used in B2B; many businesses issue English invoices with legal names matching GST registration exactly. Regional languages appear on some domestic documents—ensure numeric tax breakdowns stay clear for reconciliation systems. Invoice copies for international parents should still show GSTIN and Indian rupee amounts in formats AP tools can parse without manual translation.

Digital invoicing rules

E-invoice mandates, GSTR-1 reporting, and GST portal validations push issuers toward ERP-integrated workflows. Retain IRN JSON, signed QR renditions, and audit logs alongside human-readable PDFs. API downtime or IRP latency is not an excuse to skip issuance controls—have a contingency that still meets legal timing expectations for tax invoices in your sector. E-way bills for goods movement may be required in parallel—treat logistics documents as part of the evidence bundle, not separate “someone else’s problem.” Reconciliation between GSTR-1, GSTR-2B, and books is easier when invoice numbers never reuse across financial years.

Invoice numbering rules

GST rules require a unique, sequential invoice number for each financial year, not exceeding sixteen characters and containing only alphanumeric characters, hyphens, or slashes. The number must be generated in a consecutive serial order specific to a financial year. Businesses may maintain multiple series using prefixes for different branches, units, or supply types (for example, B1/2026-27/0001 for Branch 1), but each series must be internally sequential. Credit notes and debit notes follow separate numbering requirements but must reference the original invoice number and date. When the financial year rolls over (1 April), you may restart numbering. Importantly, for businesses under the e-invoicing mandate, the IRP validates numbering -- duplicate numbers for the same GSTIN and financial year will be rejected. Gaps in the sequence must be documented in your records; the department may view unexplained gaps as evidence of suppressed sales.

Common exemptions and special cases

The Composition Scheme (section 10 of the CGST Act) is available to businesses with aggregate turnover below INR 1.5 crore (INR 75 lakh for certain special-category states). Composition dealers issue a Bill of Supply rather than a tax invoice and cannot collect GST from buyers -- their invoices must state "Composition taxable person, not eligible to collect tax on supplies". Exempt supplies and nil-rated supplies are issued as Bills of Supply, not tax invoices. Reverse Charge Mechanism (RCM) applies to specified goods and services (such as legal services, GTA services, and imports of services) where the recipient is liable to pay GST -- the supplier's invoice must indicate that tax is payable under reverse charge. Export invoices must carry an endorsement that the supply is meant for export on payment of IGST or under bond/LUT without payment of tax. SEZ supplies follow similar export-style documentation. E-invoicing thresholds have been progressively lowered -- as of recent notifications, businesses with aggregate turnover exceeding INR 5 crore must generate IRN through the IRP (check the latest CBIC notification for the current threshold, as it continues to decrease). Businesses below the e-invoicing threshold still issue standard tax invoices but without IRN/QR requirements.

Record retention requirements

Section 36 of the CGST Act requires every registered person to retain books of account, including invoices, for seventy-two months (six years) from the due date of filing the annual return for the relevant year. If you are involved in any proceedings (appeal, revision, investigation), records must be retained until one year after the final order. Electronic invoices (including IRN JSON, signed QR codes, and PDF renditions) should be stored in their original format alongside your GSTR-1 and GSTR-3B records. The department may request electronic records in specified formats during audits -- ensure your ERP can export data compatible with departmental tools. Cloud storage is acceptable, but the records must be accessible and producible within India when requested. For businesses under the e-invoicing mandate, the IRP portal retains IRN data, but you should maintain your own copies as the IRP does not guarantee indefinite access to historical records.

E-invoicing status

India's e-invoicing system is one of the most developed in the world. It requires applicable businesses to generate an Invoice Reference Number (IRN) by submitting invoice data to the Invoice Registration Portal (IRP) in a JSON schema before or at the time of issuing the invoice. The IRP validates the data, generates a unique IRN and a digitally signed QR code, and returns them to the issuer for inclusion on the invoice. The threshold for mandatory e-invoicing has been progressively lowered from INR 500 crore (2020) to the current level (check the latest CBIC notification -- it has reached INR 5 crore and may go lower). B2C invoices are not currently required to go through the IRP but must include a dynamic QR code for businesses above specified thresholds. The e-invoice data auto-populates GSTR-1 (sales return), reducing manual filing effort and mismatches. Multiple IRP operators are authorised, and businesses can integrate via API or use the NIC portal for manual generation. The system supports cancellation within 24 hours of generation; after that, corrections must flow through credit notes or debit notes with their own IRN.

Penalties

Mismatched invoices, late IRN generation, or incorrect GSTIN/HSN usage can cause ITC denials for buyers and demands for suppliers. Under section 122 of the CGST Act, issuing an incorrect invoice can attract a penalty of INR 10,000 or the tax amount involved, whichever is higher. Failure to issue an invoice entirely carries the same penalty floor. For e-invoicing non-compliance, issuing an invoice without obtaining an IRN when required is treated as if no invoice was issued -- triggering penalties and denying the buyer's ITC claim. Interest on late-paid GST accrues at 18% per annum from the date the tax was due. Fraudulent invoicing (creating fake invoices to claim ITC without actual supply) is treated extremely seriously under sections 132 and 132A -- penalties can reach 100% of the tax amount, and criminal prosecution can result in imprisonment of up to five years (or longer for repeat offences). The government has conducted multiple nationwide drives against fake invoice rings, making this an active enforcement area. Buyers may blacklist vendors whose ITC claims fail departmental matching, so invoice hygiene is a commercial issue as well as a legal one.

FAQ

What is the current e-invoicing turnover threshold? The threshold has been lowered multiple times. As of recent CBIC notifications, businesses with aggregate annual turnover exceeding INR 5 crore must generate e-invoices through the IRP. Check the latest notification on the CBIC website or the GST portal as the government has indicated plans to lower it further, potentially covering all GST-registered businesses.

Do I need HSN codes on every invoice? Yes, but the number of digits required depends on your turnover. Businesses with turnover up to INR 5 crore must report four-digit HSN codes; businesses with turnover above INR 5 crore must use six-digit codes. For e-invoicing, the IRP validates HSN codes against the official master -- invalid codes will cause rejection. SAC codes apply to services and follow the same digit requirements.

Can I correct an e-invoice after it has been generated? You can cancel an e-invoice on the IRP within 24 hours of generation. After 24 hours, you cannot cancel or amend the IRN -- instead, you must issue a credit note or debit note (which also requires its own IRN if you are above the e-invoicing threshold) to adjust the original invoice. Plan your invoice review workflow to catch errors within the 24-hour window.

What is the difference between CGST/SGST and IGST on an invoice? For intra-state supplies (seller and buyer in the same state), you charge CGST (central) and SGST (state) at equal rates that together equal the applicable slab rate. For inter-state supplies (seller and buyer in different states, or exports), you charge IGST at the full slab rate. The place of supply rules in sections 10-13 of the IGST Act determine which treatment applies. Getting this wrong is one of the most common ITC dispute triggers.

Template link

Start from our Indian invoice template for multi-slab GST lines. Use the invoice tax compliance guide and tax rate lookup tool. Official sources include the GST portal and the Central Board of Indirect Taxes and Customs. Join InvoiceQuickly early access to keep India GST invoices consistent with your global stack.