GST tax invoice: the complete guide (pakka bill, Rule 46, and when it is valid)

• →Pakka bill: a tax invoice carrying the seller's GSTIN, a consecutive invoice number, the GST rate and amount, and the buyer's details. It is the only sale document the law recognises for input tax credit.
• →Kaccha bill: a rough estimate, cash memo, or handwritten note that records an amount without the GST detail the law requires. Fine as a personal note, never as a tax document on a taxable sale.
• →When is an informal slip actually fine? Only when you are below the GST registration threshold and unregistered. You then issue no tax invoices at all, so a plain receipt or cash memo is enough to record the sale; there is no GST to break up and no input tax credit to pass on.
• →Even then, a bill of supply under Rule 49 beats a bare slip: it is a real GST document that simply carries no tax, so it is cleaner expense proof than a rough note. A kaccha bill stops being fine the moment you are registered, because Section 31^[1] then makes a tax invoice mandatory on every taxable sale.

Rule 46 groups into four blocks: supplier, recipient, line items, and tax. Several clauses are conditional, recipient details differ for a registered versus an unregistered buyer, place of supply applies inter-state, a reverse-charge flag is required, and the last two hinge on e-invoicing status.

• →The ₹50,000 clause (e)-(f) test is per invoice, not per customer over time: a single invoice at or above ₹50,000 to an unregistered buyer triggers the full name-address-state capture.
• →A missing reverse-charge flag on clause (p) is itself a compliance gap, even when the actual liability is zero.
• →Do you know? The GSTIN in clause (a) is not random: it is a 15-character code, positions 1-2 the state code, 3-12 the seller's PAN, 13 the entity digit, 14 a default "Z", 15 a checksum. If the embedded PAN does not fit the seller named on the bill, treat it as a red flag and verify it on the GST portal Search Taxpayer tool^[16] before claiming credit.

GST is levied as three components: CGST under Section 9 of the CGST Act^[8], SGST under Section 9 of the matching State GST Act, and IGST under Section 5 of the IGST Act^[8]. UTGST replaces SGST in a Union Territory with no legislature. The three never all appear on one supply: it is CGST + SGST together, or IGST alone.

• →The most common error is using the buyer's billing address instead of the statutory place of supply under Sections 10-12 of the IGST Act. On a bill-to/ship-to sale of goods, the place of supply is the location of the party billed, not the delivery address.
• →A supply to a Special Economic Zone unit is inter-state (IGST, zero-rated) even inside one state, under Section 7(5), IGST Act.
• →A wrong split is one of the cleanest ways to fail GSTR reconciliation, because the buyer claims credit under a head you did not charge. If you do charge the wrong head, Section 77 CGST and Section 19 IGST let you reclaim it without interest once you pay the correct one.

• →A wrong code carries the wrong rate, so the tax charged does not match the goods; the mismatch surfaces when the seller's return and the buyer's claim are compared, and the buyer's input tax credit can be held up.
• →Do you know? Input tax credit is the GST a buyer already paid on purchases, set off against the GST they collect on sales, and a valid Rule 46 tax invoice is the document that carries it. The second proviso to Section 16(2) of the CGST Act^[3] adds a trap: a registered buyer who claims the credit but does not pay the supplier the value plus tax within 180 days of the invoice date must reverse that credit and pay it back with interest under Section 50 (the mechanics are in Rule 37). Pay your suppliers on time, or the credit you booked comes back to bite you.
• →If you bill a service, not goods, the line carries a SAC code, not an HSN: a plumber, electrician, freelancer, or consultant classifies the work under the Service Accounting Code series, e.g. 9954 for construction and installation, 9983 for technical and professional services. Putting an HSN on a service line, or vice versa, is a common mismatch that fails GSTR-1 validation. Match the goods or service precisely on the CBIC GST portal and reuse the same code across invoices.
• →The unit of measure has its own controlled vocabulary: Rule 46(i) requires the quantity with a standard Unit Quantity Code (UQC). Use NOS for numbers, PCS for pieces, KGS for kilograms, MTR for metres, LTR for litres. Free-text units like "pc" or "nos." fail GSTR-1 and e-invoice validation.

Do you know? A dynamic UPI QR code on B2C invoices is mandatory only for a registered person above ₹500 crore aggregate turnover, under Notification 14/2020-Central Tax^[11] and the sixth proviso to Rule 46. A typical shop or freelancer is well below that line and is under no obligation to print one, though a payment QR is still good practice for getting paid.

• →The recipient GSTIN on a B2B invoice is what lets the buyer match the supply in GSTR-2B and claim input tax credit; a wrong or missing one is a frequent reason a registered customer asks for a corrected bill.
• →Recording the unregistered buyer's state on a ₹50,000-plus B2C invoice also fixes the place of supply, so it decides whether you charge IGST or CGST/SGST.
• →A registered Instagram seller in Maharashtra shipping 40 orders, 35 to consumers and 5 to GST-registered shops, issues 5 full B2B tax invoices (reported invoice-wise) and 35 B2C invoices; a consumer order shipped to Gujarat carries IGST, an intra-Maharashtra order carries CGST + SGST.

• →A proforma is a commitment-stage estimate: nothing has been supplied, it enters no GST return, and the buyer cannot claim credit against it. The moment the supply happens it is replaced by a Rule 46 tax invoice.
• →On receiving an advance you issue a receipt voucher under Section 31(3)(d), with the Rule 50 fields^[2]. GST is due on an advance for services when received (Section 13(2)); on an advance for goods, Notification 66/2017 removed that trigger, so the tax waits for the invoice. If the order is cancelled, a refund voucher under Section 31(3)(e) closes it.
• →Do you know? A credit or debit note under Section 34, CGST Act^[12] is what corrects a tax invoice after issue, and it is always raised by the supplier. A credit note (charged too much) must be declared in a return by 30 November after the supply's financial year under Section 34(2); a debit note (charged too little) has no such deadline. A credit note in your books alone does not reduce your GST: unless it is declared in the GST return, your output-tax liability stands, so a book note is not a GST note.

Take a registered wholesaler who sells ₹1,00,000 of taxable goods (18% GST = ₹18,000) and hands over a kaccha slip instead of a tax invoice. The buyer never sees the ₹18,000 in their GSTR-2B, because the seller never reported the invoice in GSTR-1. At a departmental check the ₹1,00,000 sale with no matching invoice reads as suppressed supply.

• →On that ₹18,000 of tax, the Section 122(1) penalty is the higher of ₹10,000 or the tax evaded, so ₹18,000, not ₹10,000; the ₹18,000 tax is still payable, now with Section 50^[6] interest from the original due date. A ₹1,00,000 kaccha sale can cost roughly ₹18,000 tax + ₹18,000 penalty + interest, against ₹0 had a pakka bill been raised.
• →Wrong or missing GSTIN, and a wrong or missing HSN/SAC code, both block the buyer's credit and flag the invoice at GSTR-2B reconciliation.
• →Invoice numbers that are not unique and sequential (Rule 46(b)) read as suppression; a pakka bill generator numbers each invoice in one continuous series automatically.
• →Claiming input tax credit on Section 17(5)^[3] blocked credits, most motor vehicles, food and beverages, and personal-use goods, invites a demand even when the invoice itself is valid.

• →Above ₹5 crore, a covered B2B invoice (also exports, SEZ, and reverse-charge supplies, but not B2C) must be registered on the Invoice Registration Portal (IRP), which returns an Invoice Reference Number (IRN), a 64-character hash, and a signed QR code to print on the bill. Your billing software still creates the invoice; the IRP only registers it.
• →An invoice that needed an IRN but does not carry one is not a valid tax invoice under Rule 48(5), so the buyer loses input tax credit and the seller faces a penalty. A kaccha slip cannot carry an IRN at all.
• →Some classes are exempt from e-invoicing even above ₹5 crore: banks, NBFCs and other financial institutions, insurers, goods transport agencies, passenger-transport operators, and cinemas or multiplexes need not generate an IRN whatever their turnover, under the Rule 48(4) exemption notifications.
• →An e-invoice IRN is not an e-way bill. They are separate documents: the IRN registers the invoice, the e-way bill covers the movement of goods above the value threshold. Generating an e-invoice does not remove the e-way-bill requirement, though the portal can create the e-way bill from the same data.
• →A separate 30-day reporting window applies at ₹10 crore-plus turnover: from 1 April 2025, each invoice, credit note, and debit note must reach the IRP within 30 days of its date, per the GSTN advisory of 5 November 2024^[14]; miss it and the portal blocks the IRN.
• →The ₹5 crore figure is year-variable: the GST Council has discussed ₹2 crore, but as of FY 2026-27 nothing lower is notified. Check the CBIC notifications page^[13] before assuming you are outside it.

1. Check whether you must register. Section 22 of the CGST Act^[15] makes registration mandatory over the turnover threshold (broadly ₹40 lakh for goods, ₹20 lakh for services, lower in special-category states, per Notification 10/2019-CT). Section 24 also forces it regardless of turnover if you sell inter-state or through an e-commerce platform.
2. Get your GSTIN. Register on the GST portal and obtain your 15-character GSTIN. Every pakka bill must print it.
3. Raise a Rule 46 tax invoice. Replace the rough slip with an invoice carrying all the Rule 46 fields: GSTIN, a consecutive invoice number, HSN/SAC, the CGST/SGST or IGST split, and the place of supply.
4. Report it in GSTR-1. File each B2B invoice in GSTR-1 so it flows into the buyer's GSTR-2B and they can claim the input tax credit. This is the step a kaccha bill skips, and the step an audit checks.

• →For a supply of services, Section 31(2) read with Rule 47^[2] sets a time limit, generally within 30 days of the supply. Invoicing promptly starts the client's payment clock.
• →A clean tax invoice clears the accounts check on the first pass, the practical difference between a payment that moves and one that sits in a query queue.
• →A pakka bill generator fills every Rule 46 field and numbers the invoice in sequence, so the document is binding and query-proof from the first download.