A tax invoice is the document a registered person must issue under Section 31 of the CGST Act, 2017 for every taxable supply of goods (before or at removal or delivery) or services (within 30 days of supply), containing the particulars prescribed in Rule 46 of the CGST Rules: supplier and recipient names, addresses and GSTINs, a consecutive serial number, date, HSN or SAC code, description, quantity, taxable value, tax rate and amount, place of supply and signature or digital signature. Suppliers above the notified turnover must generate it as an e-invoice with an IRN.
How a tax invoice works in India
The supplier raises the invoice (with an IRN and QR code if e-invoicing applies), sends it with the goods along with the e-way bill, and reports it in GSTR-1 for the month. The buyer sees it in GSTR-2B and claims input tax credit. The invoice states the payment terms or refers to the PO. If the buyer does not pay within 180 days, it must reverse the credit; if the invoice is not reported, the buyer loses the credit. In litigation, the invoice together with the e-way bill, challan and GRN proves the supply; the GST return filings corroborate it from the government's own records.
| Invoice field | Use in recovery |
|---|---|
| Date and number | Start of credit period; matches GSTR-1 and e-way bill |
| Buyer GSTIN and address | Correct party and address for notice |
| PO reference | Links to the contract terms |
| Payment terms | Due date for interest (45-day cap for MSME suppliers) |
| IRN/QR | Proves the invoice was registered with the government |
Why it matters for getting paid
A compliant invoice reported in GSTR-1 is hard for a buyer to deny: it appears in the buyer's own GSTR-2B and the buyer has usually claimed credit on it. The 180-day ITC reversal rule gives the buyer a tax reason to pay. Printing the payment term and the interest rate on the invoice, and getting it accepted, helps the interest claim. See input tax credit reversal, GSTR-2B and e-way bill.
How FundRaksha uses it
FundRaksha's advocates match each invoice to its GSTR-1 entry, e-way bill and delivery proof, and point out in the notice that the buyer has claimed ITC on the very invoices it has not paid. Buyers' tax teams understand this immediately. The approach is part of why about 60% of FundRaksha cases settle before court; fee 30% on recovery.
Worked example (hypothetical)
A Vadodara valve manufacturer issues tax invoice no. 221 dated 10 January for ₹8,00,000 plus 18% GST (₹1,44,000), total ₹9,44,000, PO terms 30 days, reported in GSTR-1 for January. The buyer claims ITC of ₹1,44,000 in February. Payment is due 9 February; nothing is paid by 9 July (180 days from the invoice date), so the buyer must reverse ₹1,44,000 of ITC with interest. The notice sent on 15 July claims ₹9,44,000 plus interest from 9 February and notes the ITC reversal. Assuming the supplier is a small enterprise and a 6.5% bank rate (19.5% a year, monthly rests), five months of interest on ₹9,44,000 is about ₹79,200.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.