Maintaining taxable sales documents is one of the prime responsibilities of any GST-registered business. All transactions that are subject to taxation must be taxed, and the sales tax amount must be recorded, regardless of the number and amount of applicable taxes.

One of the crucial elements of tax accounting is a tax invoice.

The seller must keep a record of the tax payable total amount for the buyer to possess the same document and, if required, claim an input tax credit.

We’ll discuss what a tax invoice is and how to create one in this article.

What is Tax Invoice?

A tax invoice outlines the appropriate tax that a certified seller gives to the customer of their goods and services. It will usually include the product invoice name and description, the invoice date, the invoice number, and the services performed.

The seller must charge services tax or goods tax amount for each service or product sold. If you undertake a taxable sale, your GST-registered customers will need an invoice from you to claim their purchase-related tax credits. It is provided when anything is sold to resell it.

These tax invoices might be duplicates or originals, depending on the circumstances. Because there are no such restrictions, product supply may be changed based on the availability of registered providers.

How is a Tax Invoice Generated?

Creating a valid tax invoice for your accounting purposes is a task that requires serious precision and is usually done through a fixed module. The following are the steps of how a sales tax invoice is generated:

  • Label the document “Tax Invoice.”
  • On the right side of the header, include the name, logo, post, phone number, and email of the businesses.
  • Type your customer’s name and contact details of your customers as the seller’s identification after entering the details of your business.
  • Add the invoice date and number, and GST registration number before entering the payment due date and amount purchased.
  • Make a list of all the services rendered, as well as the applicable amounts that the client will pay to your business and standard-rated purchases.
  • Remember to include shipping and calculate tax charges in the total throughout this procedure. In most cases, the sum should be put in all caps.
  • Finally, include payment conditions and authorized payment methods. You can now send regular invoices.

Using online invoicing software such as Moon Invoice can assist in simplifying the time-consuming process of preparing standard invoices and sending tax invoices.

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What to Include in a Tax Invoice?

A standard invoice generally include all relevant information to request payment regarding the deal being taxed. Such as:


The tax invoice must be named as such. It must have the title “Tax Invoice” on it.

Invoice Date

The date is critical because it notifies the accountant of when to account for the tax amount.

Invoice Number

A unique number is required for convenient tracking. Regardless of the company’s invoice numbering method, each tax invoice must be assigned a unique number.

The Buyer’s Name, Tax Payable, Billing, and Delivery Address

Although the shipping and billing addresses may differ, the bill-to address may be the buyer’s registration address. Both addresses must be included on the tax invoice.

Bill from Details

It is the seller’s name and the registered location of the business. This location may be different from the ship-from address if a seller has many establishments.

Registration Numbers

The tax invoice contains a list of all the seller’s necessary registration numbers.

Ship from Details

A company’s administrative and logistical offices may be in different locations than actual storehouses. An inventory of the goods and services provided in the taxable sale.

The Transaction’s Worth Before Taxes

The tax information, including the tax payable details by your customers on each taxable item.

Taxation Details of Tax-Registered Customers

It includes the value of each item and quantity after taxes. You also need to calculate any additional price, special offers, or financial data associated with the transaction.

Payment Due

The total amount owed on the invoice, as well as the total sales taxes due to be paid.


It includes the signature of a supplier-authorized signatory.

Terms and Conditions of Tax Invoices

This document also includes any terms and conditions that apply to the transaction.

Is Tax Invoice Same as Receipt?

Before giving receipts and invoices to request payment from customers, vendors produce them. A tax invoice and a receipt are two separate entities, even if they may contain fairly similar information.

Before obtaining payment, invoices are given to the customer or business to seek payment. The expenses, any reductions, the tax owing, and buyer and seller information are all included.

When you make a payment, you will be sent a receipt. It demonstrates that money was received and that the taxable trade was completed. It also acts as proof of ownership. The tax invoice includes the products and services provided, as well as any discounts, taxes, payment options, price, and total amount paid.

Importance of Tax Invoice

Tax invoices are required to document the delivery of goods or services and other sorts of financial reporting. They are important for a variety of purposes other than accountancy.

Let’s take a look at its usefulness:

  • To back up a tax credit request from a tax-registered customer.
  • To establish whether or not the given goods or services are taxed.
  • To ascertain the payment deadline as of the receipt of the tax invoice.
  • For the state’s tax system to recognize transactions and provide a tax identification or tax proof number.
  • A tax invoice will be required to support the input tax credits claim.
  • Tax invoices will help the relevant government agency prevent tax evasion.
  • To compute tax charged correctly for a financial year and aid to claim tax relief from the government.


Tax invoices are an essential component of invoicing for any business. Keeping them in check allows for the expediting of invoices and payments that are due.

Consider employing Moon Invoice’s online invoicing software to automate invoicing and ease your tax season.


Jayanti Katariya
Jayanti Katariya About the author

Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.