GST Invoicing Rules 2026: Mandatory Fields, HSN Codes & B2B Compliance

Under Indian Goods and Services Tax (GST) laws, issuing a valid, compliant invoice is not merely a bookkeeping requirement—it is a legal necessity for claiming Input Tax Credit (ITC) and avoiding steep penalties under Section 122 of the CGST Act.

1. Mandatory Fields on a Tax Invoice

Every GST tax invoice issued by a registered business in India must include the following 16 mandatory fields:

• Supplier Details: Business name, registered address, and 15-digit GSTIN.
• Consecutive Serial Number: Unique invoice number containing only alphabets, numerals, and special characters (hyphen or slash) not exceeding 16 characters.
• Date of Issue: Date when the invoice is generated.
• Recipient Details: Name, address, and GSTIN (for B2B supply) or State Name & Code (for B2C supply over ₹50,000).
• Place of Supply (POS): The state where the goods or services are delivered, along with the 2-digit state code.
• HSN / SAC Code: Harmonized System of Nomenclature code for each item.
• Description of Goods or Services: Item name, unit of measure (e.g. PCS, KGS, BOX), quantity, and unit rate.
• Taxable Value and Discounts: Net taxable amount after trade discounts.
• Tax Rates and Amounts: Clear bifurcated columns for CGST, SGST, IGST, and Cess.
• Signature or Digital Verification: Authorized signature or digital signature certificate (DSC).

2. Understanding HSN Code Requirements

Depending on your aggregate annual turnover (AATO) in the preceding financial year, the required digit length for HSN codes varies:

• Turnover up to ₹5 Crores: Minimum 4 digits for B2B invoices (optional for B2C).
• Turnover above ₹5 Crores: Mandatory 6 digits for all B2B and export invoices.
• Chemicals & Specialized Goods: 8-digit HSN codes are mandatory regardless of turnover.

3. Intra-State vs Inter-State Tax Bifurcation

One of the most common errors made by small traders is applying CGST + SGST instead of IGST. Remember:

• Intra-State (Same State): Supplier State == Recipient State → Apply CGST (50%) + SGST (50%).
• Inter-State (Different State): Supplier State != Recipient State → Apply IGST (100%).

4. How Vedant Billing Automates Compliance

With Vedant Billing, you never have to manually calculate taxes or memorize state codes. When you enter a party's GSTIN, our system automatically detects the state, sets the Place of Supply, validates the GSTIN checksum, and splits the taxes accurately into CGST/SGST or IGST.