The Complete Guide to GST Invoicing: CGST, SGST, IGST, HSN & LUT Exports
Master tax splits, state place-of-supply rules, HSN/SAC codes, and export billing for Indian businesses and freelancers.
GST Invoicing Fundamentals
Under the Indian Goods and Services Tax (GST) regime, generating a compliant tax invoice is essential not only for your tax filing (GSTR-1 and GSTR-3B) but also for your B2B clients to claim Input Tax Credit (ITC).
An improperly formatted invoice can cause your client's ITC to be rejected, stalling payments and creating accounting friction.
CGST + SGST vs IGST: The Place of Supply Rule
The single most common mistake in Indian invoicing is misapplying intra-state versus inter-state tax rates:
| Supply Type | Seller State vs Buyer State | Applicable Taxes |
|---|---|---|
| Intra-State | Same State (e.g. Maharashtra to Maharashtra) | CGST (9%) + SGST (9%) = 18% |
| Inter-State | Different States (e.g. Karnataka to Delhi) | IGST (18%) |
| Export / SEZ | Outside India (e.g. India to USA / EU) | Zero-Rated (0%) under LUT |
HSN vs SAC Codes for Products & Services
- HSN (Harmonized System of Nomenclature): 4 to 8-digit codes for physical goods and products.
- SAC (Services Accounting Code): 6-digit codes specifically for professional and digital services.
Common SAC Codes for Tech & Creative Businesses:
- 998314: IT design and development services (Web, Mobile, Cloud applications).
- 998313: Information technology consulting and support services.
- 998361: Advertising, marketing, and lead generation services.
- 998391: Specialty design services (UI/UX, graphic design, branding).
Zero-Rated Invoicing: Exporting Under LUT
If you provide digital services, software development, or consulting to international clients (outside India), your supply is treated as an Export of Services.
Under Letter of Undertaking (LUT) filed on the GST portal:
- You do not charge 18% IGST to foreign clients.
- Invoices must state: *"SUPPLY MEANT FOR EXPORT OF SERVICES UNDER LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX"*.
- Payments must be realized in convertible foreign exchange (FIRC / e-FIRA).
Mandatory Fields for a Valid Tax Invoice
- 1Invoice Number: Unique sequential series (e.g.,
INV-2026-001). - 2Date of Issue: Exact billing date.
- 3Supplier Details: Legal Name, Registered Address, and 15-digit GSTIN.
- 4Recipient Details: Name, Address, and GSTIN (for B2B).
- 5Place of Supply: State Name and 2-digit State Code.
- 6Description & SAC/HSN: Detailed breakdown of items.
- 7Tax Split Columns: Taxable Value, CGST/SGST/IGST rates and amounts.
- 8Digital Signature / Stamp: Authorized signatory validation.
Automating GST Compliance with BillPond
With BillPond:
- Select GST Tax Slab and the engine automatically splits CGST/SGST or IGST based on the customer's state code.
- Dedicated HSN/SAC code columns ensure 100% compliance on vector PDF exports.
- Quick Add via GSTIN auto-fills official legal company names and addresses directly from GST portal data in 1 click.
Apply CGST + SGST (9% + 9% for 18% slab) when your registered business state matches your customer state (Intra-state). Apply IGST (18%) when the states differ (Inter-state).
Financial consultant and chartered tax specialist advising digital service exporters on GSTIN compliance, SAC codes, and SEZ zero-rating.
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