Selling online in India means issuing tax invoices that satisfy GST rules. Getting this wrong creates reconciliation problems at filing time and, at worse, penalties. The requirements are not complicated, but they do need to be built into your store rather than patched afterwards.
What this article covers
- What a compliant tax invoice must carry
- HSN codes belong on your products
- Place of supply drives CGST/SGST versus IGST
- Inclusive or exclusive pricing, decided consciously
- E-invoicing thresholds change, so check the current one
- Credit notes, returns and TCS
What a compliant tax invoice must carry
Your legal name, address and GSTIN; a consecutive invoice number and date; the customer’s name and address, plus their GSTIN if they are registered; HSN or SAC codes; description, quantity and value; the taxable value, the rate and amount of each tax; the place of supply; and a signature or digital signature.
HSN codes belong on your products
Every product needs its correct HSN code stored against it, and the number of digits required depends on your turnover slab. Map codes at the product level in your catalogue rather than trying to determine them at checkout, and have your accountant verify the mapping once rather than guessing per item.
Place of supply drives CGST/SGST versus IGST
If the delivery address is in your own state, you charge CGST and SGST. If it is in another state, you charge IGST. Your store must determine this from the shipping address automatically. Manual handling is where errors creep in and where reconciliation time gets consumed.
Inclusive or exclusive pricing, decided consciously
Consumer-facing stores usually display GST-inclusive prices, because a price that rises at checkout is a well-documented cause of abandonment. B2B stores generally display exclusive prices with tax added at checkout. Configure this deliberately and label it clearly either way.
E-invoicing thresholds change, so check the current one
Businesses above a specified aggregate turnover must generate invoices through the government’s Invoice Registration Portal and obtain an IRN. The threshold has been lowered several times since introduction, so verify the limit that currently applies to you with your chartered accountant rather than relying on an article’s figure.
Credit notes, returns and TCS
Returns require properly issued credit notes linked to the original invoice. If you sell through marketplaces, they collect tax at source and you must reconcile that against your own records. Build the return workflow into your store from the start; retrofitting it is unpleasant.
What this means for businesses in our region
This applies as much to a business in Haldwani, Kashipur or Rudrapur as it does to one in a metro, and arguably more, because the competitive bar in district markets is lower and therefore considerably easier to clear.
It is worth being realistic about scale, though. A business serving one district does not need the apparatus of a national brand. It needs the fundamentals done properly and maintained, which is a much smaller job than most agencies imply.
The short version
Configure invoicing correctly at build time and have a chartered accountant review a sample invoice before you launch. An hour of professional review is cheaper than a year of reconciliation.
None of this requires a large budget, which is worth stating plainly because a great deal of marketing advice assumes otherwise. What it requires is that somebody owns it. Work that belongs to everybody in a small business reliably belongs to nobody.
If you would like to discuss how any of this applies to your own business, or you simply want a second opinion on advice you have been given, we are happy to talk it through without any obligation.
Designers Den works with businesses across Uttar Pradesh and Uttarakhand on SEO, web design, branding and digital marketing.
One more thing
If you take one thing from this, make it the habit rather than the tactic. The specific recommendations here will be partly obsolete within a few years. The underlying discipline, which is answering the questions your customers actually ask, in the places they actually look, consistently enough that it accumulates, will not be.