How to Prepare a Tax Invoice: Step-by-Step Guide

Whether you’re a freelancer, small business owner, or GST-registered seller, knowing how to make a tax invoice is essential for compliance and smooth business operations.

In this guide, we’ll walk you through the entire process of invoice preparation, show you what to include, and explain how tools like TaxInvoice Pro save time and eliminate errors.

What Is a Tax Invoice?

A tax invoice is a document issued by a seller to a buyer that includes details about the sale and applicable taxes. It is a legal requirement under GST for all taxable supplies and is necessary for buyers to claim input tax credit (ITC).

Contents of a Tax Invoice

Before diving into the steps, let’s cover the mandatory contents of a tax invoice as per Indian GST rules:

• Name, address, and GSTIN of the seller
• Invoice number and date
• Name, address, and GSTIN (if applicable) of the buyer
• HSN/SAC codes of goods/services
• Description of goods/services
• Quantity and unit price
• Tax rate (CGST, SGST, IGST) and tax amount
• Total value (before and after tax)
• Place of supply
• Signature or digital signature of the issuer

How to Make a Tax Invoice: Step-by-Step

Here’s how to prepare a tax invoice manually or using software:

1. Choose the Invoice Format: Start with a blank document or use a ready-made template. Platforms like TaxInvoice Pro offer GST-compliant formats for both goods and services.
2. Add Seller and Buyer Details: Include your business name, address, GSTIN, and contact info. Add the client’s details, including GSTIN if they’re registered.
3. Assign a Unique Invoice Number: Invoice numbers should be consecutive and unique for each financial year.
4. List the Products or Services: Include a clear description, HSN/SAC codes, quantity, rate, and amount.
5. Calculate Taxes: Break down the applicable tax rates (CGST, SGST, IGST) and display the amounts clearly.
6. Add Total Payable: Show subtotal, tax total, and final total. Optionally include payment terms and due date.
7. Include Declaration and Signature: Mention any legal declaration if needed and sign the invoice digitally or manually.

Example: Specimen of a Tax Invoice

Here’s a basic layout to help prepare a specimen of tax invoice:

INVOICE
Seller: DevTech Solutions
GSTIN: 29ABCDE1234F2Z5
Invoice No: 0045
Date: 13-May-2025
Buyer: WebCo Pvt Ltd
GSTIN: 07XYZAB5678G1Z3

Description: Website Development Services
HSN Code: 9983
Quantity: 1
Rate: ₹20,000
CGST @9%: ₹1,800
SGST @9%: ₹1,800
Total Amount (incl. GST): ₹23,600

Save Time with TaxInvoice Pro

Instead of manually formatting invoices and worrying about compliance, switch to TaxInvoice Pro:

• ✅ Auto-fills buyer/seller info
• ✅ Built-in HSN/SAC suggestions
• ✅ GST calculation done for you
• ✅ Ready-to-use templates
• ✅ One-click PDF, email, and print options
• ✅ Tracks payments and overdue invoices

Whether you're issuing 5 or 500 invoices a month, TaxInvoice Pro helps you stay accurate and professional.

Conclusion

Knowing how to make a tax invoice is a must-have skill for Indian businesses and freelancers. But you don’t have to do it manually. Use TaxInvoice Pro to simplify the process, avoid compliance issues, and focus on what matters—running your business.