If you deal in physical goods—whether you’re a manufacturer, wholesaler, distributor, or retailer—GST tax invoice rules for goods are something you simply can’t afford to ignore. Most GST notices and penalties don’t come from tax evasion, but from small invoice mistakes: issuing it late, missing details, or using the wrong document altogether.
In this blog, we’ll focus only on tax invoices related to goods. No service rules. No mixed confusion. Just goods - explained simply, clearly, and in a very practical way.
What Is a Tax Invoice for Goods Under GST?
A tax invoice for goods is a document issued by a registered supplier when taxable goods are supplied. It confirms:
- Goods have been supplied
- Ownership is transferred
- Tax liability has arisen
- Buyer can claim Input Tax Credit (ITC)
Under Section 31(1) of the CGST Act, issuing a tax invoice for goods is mandatory, unless specifically exempted.
When Must a Tax Invoice Be Issued for Goods?
This is the most important rule—and the one people mess up the most.
General Rule
“A tax invoice for goods must be issued before or at the time of supply.”
But GST further clarifies what “time of supply” means for goods.
Case 1: Supply Involves Movement of Goods
If goods are transported (by truck, courier, rail, etc.):
“Invoice must be issued before or at the time of removal of goods”
Example: Goods leave your warehouse on 10th June
- Invoice must be issued on or before 10th June
You cannot issue it on 11th June just because delivery happens later.
Case 2: Supply Does NOT Involve Movement
If goods are handed over directly (like factory pickup or shop sale):
“Invoice must be issued at the time of delivery or making goods available”
Example: Customer picks goods from your shop
- Invoice must be issued at that moment
What If Goods Are Supplied in Parts or Instalments?
This happens in machinery, construction material, bulk orders, etc.
If goods are supplied in lots, then:
- Invoice must be issued for each delivery,
- Not one combined invoice at the end (unless contract allows it and GST rules are followed).
Each movement creates its own tax event.
Continuous Supply of Goods – Special Rule
Some businesses supply goods continuously under a contract, like:
- Gas pipelines
- Electricity meters
- Water supply
- Raw material supply contracts
In such cases:
“Invoice is issued whenever a payment is received or a statement of account is generated”
This avoids confusion and keeps tax aligned with billing cycles.
Goods Sent on Approval or Sale-or-Return Basis
This is very common in industries like jewellery, garments, electronics, and books.
Key Rule:
Goods can be sent without issuing a tax invoice initially.
Instead:
- Goods move using a delivery challan
- Tax invoice is issued only when buyer approves the goods
Maximum Time Limit:
If goods are not returned or approved within 6 months,
- You must issue a tax invoice anyway.
This prevents indefinite tax delays.
Goods Sent for Exhibition or Export Promotion
When goods are sent outside India for exhibition or promotion:
- No invoice is required at the time of sending
- Delivery challan is used
But:
- If goods are sold abroad → invoice issued on date of sale
- If goods are neither sold nor returned within 6 months → invoice must be issued
This rule protects exporters while keeping GST control intact.
Mandatory Contents of a GST Invoice for Goods
GST doesn’t force a specific invoice format—but mandatory fields are non-negotiable.
Your invoice must contain:
- Supplier name, address & GSTIN
- Invoice number (unique per FY)
- Date of invoice
- Buyer name, address & GSTIN (if registered)
- HSN code
- Description of goods
- Quantity and unit
- Taxable value
- CGST/SGST or IGST rates & amounts
- Place of supply (for inter-State)
- Signature (physical or digital)
Missing these can invalidate ITC for your buyer.
HSN Code Rules for Goods
HSN codes classify goods for tax purposes.
Current Rules:
- Turnover ≤ ₹5 crore → 4-digit HSN
- Turnover > ₹5 crore → 6-digit HSN
Incorrect HSN codes can lead to:
- Wrong tax rates
- ITC mismatch
- Notices during audits
Invoice Copies Required for Goods
For goods, invoices must be issued in TRIPLICATE:
- Original – for buyer
- Duplicate – for transporter
- Triplicate – for supplier
This is especially important during movement of goods and e-way bill checks.
Export of Goods – Special Endorsement Required
If goods are exported, the invoice must clearly mention:
- “Supply meant for export on payment of IGST” OR
- “Supply meant for export under bond/LUT without payment of IGST”
Other invoice details remain the same.
Common Mistakes Businesses Make (and Get Notices For)
- Issuing invoice after goods are dispatched
- Missing HSN codes
- Wrong place of supply
- Using bill of supply instead of tax invoice
- Issuing single invoice for multiple movements
- Not issuing invoice within 6 months for approval sales
Most GST notices start right here.
Why These Rules Matter More Than You Think
GST is invoice-driven. For goods, every movement creates a trail:
Invoice → E-way bill → GSTR-1 → Buyer’s ITC
If the first document is wrong, everything downstream breaks.
Following invoice rules properly:
- Protects your buyer’s ITC
- Reduces audit risk
- Improves trust with customers
- Keeps your GST returns clean
FAQs
1. Can I issue a GST invoice after goods are delivered?
No. If movement is involved, invoice must be issued before or at removal.
2. Can goods move without invoice under GST?
Yes, but only in specific cases like approval sales, exhibitions, or job work—using a delivery challan.
3. Is invoice mandatory for goods under ₹200?
Not always. If buyer is unregistered and does not demand invoice, you can issue a consolidated invoice at day end.
4. Do I need to issue invoice for free samples?
Free samples are treated as supply in some cases. Documentation rules still apply carefully.
5. Can one invoice cover multiple deliveries?
Generally no. Each movement needs its own invoice unless continuous supply rules apply.
6. What happens if invoice is delayed?
Late invoicing can lead to penalties, interest, and ITC denial to buyer.
