If you are a freelancer in India crossing the GST threshold (₹20 Lakhs in most states), you must issue GST-compliant invoices. Getting this wrong can lead to headaches with your CA and clients.
What Must a GST Invoice Include?
According to Indian GST law, a valid tax invoice must contain specific fields. If you miss these, your client cannot claim Input Tax Credit (ITC).
- The word "Tax Invoice" clearly written at the top.
- Your Details: Name, address, and your 15-digit GSTIN.
- Client Details: Name, address, and their GSTIN (if registered).
- Unique Invoice Number & Date: A critical mistake beginners make on their very first invoice is omitting a unique invoice number. Without a distinct, sequential number for every document (e.g., INV-2026-001), you and your client will struggle to track payments, reference specific jobs in emails, and organize your accounting records at the end of the financial year.
- SAC Code: Services Accounting Code (e.g., 9983 for IT consulting).
- Tax Breakdown: CGST & SGST (if the client is in your state) OR IGST (if the client is in another state).
- Total Amount: Both in numbers and words.
- Signature: Digital or physical signature.
Example: Billing a Client
Neha, a graphic designer in Maharashtra, bills a client in Delhi for ₹50,000. Since it's inter-state, she applies 18% IGST.
- Base Amount: ₹50,000
- IGST (18%): ₹9,000
- Total Invoice Value: ₹59,000
If her client was also in Maharashtra, she would split it: 9% CGST (₹4,500) and 9% SGST (₹4,500).
👉 Need to create an invoice right now?
Generate a beautiful, compliant PDF in seconds using our Free Invoice Template.
Quick FAQs
1. Do I need to charge GST if my turnover is below ₹20 Lakhs?
Generally, no. If your turnover is below ₹20 Lakhs, you don't need a GST registration (unless you voluntarily register), and you should issue a standard 'Bill of Supply', not a 'Tax Invoice'.
2. What SAC code should freelance software developers use?
Most IT software services fall under SAC 998314 (Information technology design and development services) with an 18% GST rate.
Disclaimer
Tax laws change frequently. Please consult a registered Chartered Accountant (CA) for advice specific to your business.