GST Rule 46 Invoice Rules: Small Retailer & Shopkeeper Guide

1. Tax Invoice vs Bill of Supply: Which One Must You Issue?

Under Indian GST law, merchants cannot issue arbitrary receipts. The document type depends on your registration status and whether you are charging tax on the bill:

A 'Tax Invoice' (Rule 46) is issued by regular GST-registered merchants selling taxable goods or services. It shows your GSTIN, item rates, and exact CGST, SGST, or IGST amounts collected from the customer.

A 'Bill of Supply' (Rule 49) is issued by merchants registered under the GST Composition Scheme (turnover up to ₹1.5 Crore) or merchants selling 100% tax-exempt goods (like fresh milk, vegetables, or unbranded grains). Under the Composition Scheme, you cannot collect GST from retail customers, and the bill must carry the mandatory statement: 'Composition taxable person, not eligible to collect tax on supplies'.

2. Mandatory Fields Required on a GST Retail Receipt

Under CGST Rule 46, a compliant retail tax invoice must contain the following statutory components:

1. 1. Supplier Name, Address, and GSTIN: Clearly printed at the top of the receipt.
2. 2. Consecutive Serial Number: A unique invoice number (up to 16 characters, containing alphabets, numerals, or hyphens) specific to that financial year.
3. 3. Date of Issue: Calendar date when the bill is created at the till.
4. 4. Recipient Details (B2B vs B2C): For retail B2C sales under ₹50,000, customer name and address are optional unless the buyer requests it. For B2B sales or bills above ₹50,000, customer name, address, and GSTIN (for B2B) are mandatory.
5. 5. Description of Goods & Unit Quantity: Plain item description, quantity, and unit of measurement (pieces, kg, metres).
6. 6. Total Value and Tax Breakdown: Total value of goods, tax rate (5%, 12%, 18%, 28%), and split of CGST, SGST, or IGST.
7. 7. Signature or Digital Notice: Signature or digital notice that the document is a computer-generated invoice.

3. When is the HSN Code Mandatory vs Optional?

Many small retailers believe they must print a 6-digit Harmonized System of Nomenclature (HSN) code on every Parle-G biscuit packet. That is incorrect. The GST Council rules state:

If your shop's annual turnover is below ₹5 Crore and you sell primarily to local neighbourhood consumers (B2C), printing HSN codes on every retail thermal slip is not mandatory by law.

4. MRP-Inclusive Pricing: Avoiding the Dual Overcharge Trap

Under the Legal Metrology (Packaged Commodities) Rules, no merchant in India may sell packaged goods above Maximum Retail Price (MRP). Because MRP is already inclusive of all taxes, adding GST on top of MRP at checkout is illegal and results in heavy consumer court penalties.

In Karobari, tax is reverse-calculated from the retail price rather than added on top, ensuring retail shopkeepers collect compliant tax without overcharging neighbourhood consumers.