If you are a freelancer or small business owner registered under GST in India, issuing a proper tax invoice is not optional — it is a legal requirement. Your client needs a valid GST invoice to claim input tax credit (ITC), and you need to report the same in your GST returns. Yet creating invoices remains one of the most tedious parts of running a freelance business. This guide explains exactly what a valid GST invoice must contain, how CGST/SGST/IGST works, what HSN and SAC codes are, and how to generate professional GST invoices online for free — without any software subscription.
What is a GST Tax Invoice?
A GST tax invoice is a document issued by a GST-registered supplier to a buyer for the supply of taxable goods or services. It serves as the primary document for claiming input tax credit under GST. Under the CGST Act 2017, a tax invoice must be issued within 30 days of the supply of services (45 days for banking and financial institutions). The invoice must contain specific mandatory fields — missing any of them can make the invoice invalid for ITC purposes, creating problems for your client and potentially triggering compliance issues for you.
Mandatory Fields in a GST Invoice
- Name, address, and GSTIN of the supplier
- A consecutive serial number — unique for each financial year — containing only alphabets, numerals, or special characters like hyphen or slash
- Date of issue of the invoice
- Name, address, and GSTIN (if registered) of the recipient
- HSN code for goods or SAC code for services
- Description of goods or services
- Quantity and unit of measure for goods
- Total value of supply before tax
- The applicable GST rate (CGST + SGST for intra-state, IGST for inter-state)
- Amount of tax charged — shown separately for CGST, SGST, and IGST
- Place of supply (state)
- Whether the transaction is a forward charge or reverse charge
- Signature or digital signature of the supplier or authorized representative
CGST, SGST, and IGST — Which Applies to Your Invoice?
The type of GST applicable on your invoice depends on whether the supply is intra-state (within the same state) or inter-state (between different states). If your business is registered in Maharashtra and your client is also in Maharashtra, the supply is intra-state — CGST (Central GST) and SGST (State GST) each apply at half the applicable rate. For an 18% GST service: 9% CGST + 9% SGST. If your business is in Karnataka and your client is in Delhi, the supply is inter-state — IGST (Integrated GST) applies at the full rate: 18% IGST. The place of supply is typically the location of the recipient for services. For exported services, the place of supply is outside India and the supply may qualify as zero-rated.
Always enter the correct Place of Supply on your invoice — this determines CGST+SGST vs IGST. An incorrect place of supply can make your invoice non-compliant and prevent your client from claiming ITC.
HSN and SAC Codes — What Are They?
HSN (Harmonized System of Nomenclature) codes are used to classify goods for GST purposes. SAC (Services Accounting Code) codes are used to classify services. Both are mandatory on GST invoices. For businesses with turnover up to ₹5 crore, 4-digit HSN/SAC codes are required. For turnover above ₹5 crore, 6-digit codes are required. Common SAC codes for freelancers: 998314 for software development services, 998361 for graphic design services, 998363 for advertising services, 99831 for IT consulting, 998212 for accounting services.
GST Invoice Numbering Rules
GST invoice numbers must be consecutive and unique within a financial year (April to March). They can contain letters, numbers, and special characters like hyphens or slashes. Common formats include INV-2025-001, 2025-26/001, or simply 001. Once used, an invoice number cannot be reused. If you cancel an invoice you should issue a credit note against it rather than reusing the number. Starting a new financial year you can reset the sequence.
Invoicing for Export (Zero-Rated Supplies)
If you are providing services to clients outside India — a common scenario for freelance developers, designers, and consultants — the supply may qualify as zero-rated under GST. Export of services is zero-rated when payment is received in convertible foreign exchange and the service recipient is located outside India. You should issue the invoice in the foreign currency (USD, EUR, etc.) and mark it as an export invoice. You can either export under bond/LUT (Letter of Undertaking) without paying IGST, or pay IGST and claim a refund. Most freelancers use the LUT route to avoid cash flow issues.
For export invoices always mention the country of origin, the foreign currency amount, and the equivalent INR value. Keep records of Foreign Inward Remittance Certificates (FIRC) from your bank as proof of payment receipt in foreign exchange.