GST Invoicing Guide for Indian Small Businesses in 2026

What a Valid GST Invoice Must Contain

Under the GST Act, every tax invoice issued by a registered person must include specific fields. Missing any of these can make the invoice invalid — and your buyer won't be able to claim Input Tax Credit (ITC).

Here's what's mandatory:

• Supplier details — name, address, and GSTIN
• Invoice number — unique, sequential, max 16 characters
• Date of issue
• Buyer details — name, address, GSTIN (if registered), state code
• HSN/SAC code — for goods (HSN) or services (SAC)
• Description, quantity, and unit of goods or services
• Taxable value — the amount before tax
• Tax rate and amount — split into CGST + SGST or IGST
• Place of supply — determines inter/intra-state
• Total amount
• Signature — physical or digital

CGST vs SGST vs IGST — When Each Applies

This trips up a lot of small business owners. The rule is straightforward:

• Intra-state supply (seller and buyer in the same state): charge CGST + SGST, split equally. For example, 18% GST = 9% CGST + 9% SGST.
• Inter-state supply (seller and buyer in different states): charge IGST at the full rate. For example, 18% IGST.

Reserve handles this automatically. When you set your Company State in Settings and enter the buyer's state on the invoice, the app applies the correct tax split.

Common Mistakes Small Businesses Make

1. Wrong HSN/SAC codes — using generic codes instead of the specific 4-digit or 8-digit code for your product or service
2. Missing Place of Supply— if you don't specify the buyer's state, the tax split defaults to intra-state, which may be wrong
3. Duplicate invoice numbers — GST requires sequential, unique numbering within each financial year
4. Not issuing credit notes — if you give a discount after invoicing or goods are returned, a proper CN is required under GST
5. Mixing up B2B and B2C — invoices to registered buyers need their GSTIN; B2C invoices above ₹2.5 lakh interstate need special treatment in GSTR-1

How Reserve Handles All of This

Reserve was built specifically for Indian GST compliance. Here's what it does automatically:

• Auto-generates sequential invoice numbers (INV-01, INV-02, ...)
• Calculates CGST+SGST or IGST based on Place of Supply
• Supports multiple GST rates on the same invoice (5%, 12%, 18%, 28%)
• Stores HSN/SAC codes per product and prints them on every invoice
• Exports GSTR-1, GSTR-3B, and HSN Summary reports with one click
• Generates professional A4 PDFs and 80mm thermal receipts with full tax breakdowns