How GST Billing Works for Distributors in India

1. CGST and SGST, or IGST?

It depends on where the goods go. Selling to a customer in your own state, you charge CGST and SGST — each half of the item's GST rate. Selling to another state, you charge IGST at the full rate. The customer's state (the place of supply) decides it, not where you are billing from.

2. What Goes on a Tax Invoice

• Your name, address and GSTIN; the customer's, with their GSTIN if they have one.
• An invoice number that runs without gaps in each financial year (up to 16 characters), and the date.
• For each item: description, HSN code, quantity, unit, rate, taxable value, GST rate and the tax amounts.
• The place of supply, the total in figures and words, and your signature.

If you are on the composition scheme, or sell only exempt goods, you issue a bill of supply instead — no GST is charged on it.

3. Returns, Short Deliveries and Credit Notes

Never edit or delete an invoice once it is issued. When goods come back, arrive short or are damaged, issue a credit note against that invoice. It lowers what the customer owes and the tax you report, and it goes into your GSTR-1. There is a time limit: credit notes for a financial year must be declared by 30 November after it ends (or your annual return, if earlier).

4. GSTR-1, GSTR-3B and Input Credit

GSTR-1 lists your sales — invoices, credit notes and HSN summaries. GSTR-3B is where you pay the tax due after claiming input tax credit on what you bought. You can only claim credit on purchases your own suppliers have reported, so buy from registered suppliers who file on time. Businesses with a turnover up to ₹5 crore can choose to file quarterly under the QRMP scheme.