GST prescribes several documents that look alike on paper and behave completely differently in law. VAT Invoice is one of them. Here is what it does, what it must contain, and where it is commonly misused.
What every one of them has in common
Whichever document it is, three things apply. It needs a consecutive serial number unique within the financial year, of not more than sixteen characters and using only letters, numbers, hyphens and slashes. It needs identifying content for both parties. And it has to be retained for the prescribed period, which is counted from the due date of the annual return rather than from the date on the document.
Each document type also needs its own series. A proforma numbered in your tax invoice series is a genuine problem, because it consumes a number from a series that has to be consecutive and complete.
Rates, turnover thresholds, e-invoicing applicability and the time limits for issuing all change. Nothing on this page states one as a current fact — check the notification in force for your own circumstances.
VAT invoices, and why you probably want a tax invoice
VAT was replaced by GST in India in July 2017. For a supply made in India today, the document is a GST tax invoice, and a "VAT invoice" is not a current Indian document.
There are two reasons the phrase is still searched. The first is history: VAT-era invoices from before the changeover still exist in old records, and the retention periods for them have largely run out but the files have not. The second is geography — VAT is live in the UK, the EU, the Gulf and elsewhere, and a business invoicing a customer there may genuinely need to understand that country's VAT invoice requirements.
If the supply is Indian, issue a GST tax invoice with the fields this page describes. If you are exporting, your invoice is an Indian export invoice, and whatever VAT obligation exists in the buyer's country is theirs to account for — not something you add to your invoice unless you are registered there.
Petroleum products and alcohol for human consumption remain outside GST and are taxed under the earlier state regime, which is the one real case where an Indian seller is dealing with pre-GST levies on a current sale.
Issuing these properly, free
- Tax invoices with the complete prescribed field set, tax split per line.
- Bills of supply for exempt and composition supplies, with no tax line.
- Proformas and quotations in their own series, converting to an invoice without retyping.
- Credit and debit notes that reference the original invoice rather than editing it.
- Separate consecutive series per document type, issued centrally so a number cannot repeat.
- Tax derived from the place of supply, so CGST/SGST against IGST is never a judgement call.
- A receivables position — what is unpaid, how old, and whose.
- Export of everything to CSV, Excel and JSON, on every plan.
- ₹0 on the free plan, no card, no expiry.
Setting up your document series
- Start free now — email and password, no card.
- Enter your business name, address and GSTIN once.
- Set the next number for your tax invoice series, carrying on from whatever you last issued.
- Give proformas and quotations their own prefix, so they can never consume an invoice number.
- Do the same for credit notes and for bills of supply if you make exempt supplies.
- Add your customers with their GSTINs, and your items with HSN or SAC codes and rates.
- Raise one of each document you actually use, and check the numbering behaved as you expected.
Keeping the documents for as long as you have to
Invoices and the records behind them must be retained for a prescribed period counted from the due date of the annual return for that year, not from the date on the document — so the obligation runs considerably longer than most people assume. Check the period currently in force for your own case.
That has a practical consequence. A laptop, a phone and a folder of PDFs are not a retention plan, because the horizon outlasts most hardware and most staff. Where records are kept electronically they have to stay accessible and readable for the whole period, which means a format you can still open and a copy somewhere other than the machine that produced it.
It is also worth keeping them in a form that can be searched and totalled, not only read. When records are actually asked for, the request is rarely "send me invoice 412" — it is a period, a customer or a figure that has to be reconciled.
Dull, cheap to do, and expensive to reconstruct. Those three things together are why it is worth doing now rather than later.
The numbering series, which is where most of this goes wrong
The rule is short: a consecutive serial number, unique within the financial year, not more than sixteen characters, made only of letters, numbers, hyphens and slashes. One series, or clearly separated series where you genuinely need more than one — each consecutive in itself.
A file cannot enforce any part of that. The number is typed, which means it can be repeated, skipped, or quietly rolled back when yesterday's invoice is edited into today's. Nothing notices.
The half that is forgotten is cancellation. A cancelled invoice keeps its number and stays in the series as cancelled. Deleting the row and reusing the number leaves a gap in your books and a figure in your customer's, and reconciling those two is a long afternoon with a bad outcome.
Separate series per document type is the other discipline. Proformas, credit notes and bills of supply each need their own, and mixing them is how a tax invoice series ends up with holes in it.
Invoice numbering: one unbroken series per year
The invoice number has to be consecutive, unique within the financial year, and no more than sixteen characters of letters, numbers, slashes and hyphens. Gaps invite questions. Duplicates cause them.
This is the single most common reason a spreadsheet-based billing setup fails an audit: two people billing on two machines, both starting from the last number they remember. A system that issues the number centrally cannot make that mistake.
The series restarts on 1 April, and Billixo restarts it for you rather than waiting to be told.
Credit notes, debit notes, and fixing a wrong invoice
An issued tax invoice is not something to edit. If the value was too high, or goods came back, the correction is a credit note that references the original invoice. If it was too low, a debit note. Both carry their own numbers and both appear in your return.
There is a deadline on the credit note that matters: the adjustment has to be declared by the return for the relevant month of the following financial year, or by the annual return, whichever comes first. Past that, the note exists commercially but the tax cannot be adjusted.
Software that lets you quietly retype an invoice raised last month is not doing you a favour.
Bill scanning, in practice
The single largest time cost in most small businesses is not raising invoices — it is entering purchases. A photograph of a supplier bill goes in and a structured draft comes out: supplier, GSTIN, line items, rates, tax split and total.
You check it. That is the workflow, and it is deliberate: an extraction you did not read is a liability, not a saving. But checking a filled form takes fifteen seconds and typing one takes three minutes, and that difference compounds over a month of purchases.
A note for accountants and CAs
If you are the person who has to make sense of a client’s billing at the end of the month, what you need from their software is narrow and specific: a complete outward supply summary, correct place-of-supply treatment, HSN present on every line, and an export you can open without repair.
Billixo produces GSTR-1 and GSTR-3B summaries and exports to CSV, Excel and JSON. Client-side, the invoice fields cannot be skipped, which removes the category of problem where the data was never captured in the first place.
What "free" means here, exactly
The Free plan costs nothing, needs no card, and has no expiry date. It is not a trial that turns into a bill; it is a plan you can run a small business on indefinitely.
What it gives you:
- Real GST invoices with the full Rule 46 field set
- Customers and products, with HSN/SAC held against each
- A daily and monthly invoice allowance, generous enough for a small operation
- One login
- Export of your own data, whenever you want it
What it does not give you:
- A watermark-free PDF
- GSTR-1 and GSTR-3B export
- The AI features — bill scanning, HSN lookup, the assistant
- Extra team logins, bulk import, recurring invoices and reminders
Every new account also gets the full paid feature set for its first 14 days, so you can see what the ceiling looks like before deciding whether you need it. When that ends nothing is charged and nothing is deleted — the account simply settles onto Free.
Start free now — it takes an email address and about a minute.
Reliability, backups and getting your data out
Cloud billing software is only as good as its worst day. Two things matter more than any feature list: that your data is backed up somewhere you can reach, and that you can export it in a format something else can read.
Exports here are CSV, Excel and JSON, on every plan including the free one, covering customers, products, invoices and payments. That is the honest test of whether software respects you — not what it promises, but what it lets you take when you leave.
Frequently asked questions
What is the difference between a tax invoice and a bill of supply?
A tax invoice is issued on a taxable supply and shows the tax separately, so the recipient can claim input credit. A bill of supply is issued where no tax is being charged — an exempt supply, or a composition dealer — and must not show a tax amount at all. Issuing the wrong one is a compliance error rather than a presentation choice.
Is a proforma invoice a legal invoice?
No. It is a quoted offer laid out like an invoice. It creates no tax liability, supports no input credit claim, and must not be numbered in your tax invoice series. The real tax invoice is raised when the supply actually happens.
Can I edit an invoice after issuing it?
No. Once it has gone to the customer you issue a credit note or a debit note referencing the original. Editing the original leaves two versions of one invoice number in two sets of books, and the mismatch surfaces at reconciliation — usually in the following month.
Does it work on a phone?
Yes. It is a browser application that adapts to the screen, so the same account works from a desktop at the counter and a phone in the market. There is no separate app to keep in step.
Can more than one person use it?
On the paid plans, yes — team logins with their own credentials. The Free plan is a single login, which suits a one-person operation and is usually the first limit a growing business hits.
Try it — the demo is the product
There is no sales call and no scheduled demo, because a recorded walkthrough of somebody else’s data tells you nothing about your own. Open an account instead and raise a real invoice for a real customer; it takes about a minute and costs nothing.
Open the software demo → — sign in, or create a free account from the same screen.
See full details on the home page → — features, the AI, pricing and the answers to the usual questions.
Related pages