GST for service firms: registration, invoices and e-invoicing without the jargon

GST for a services business is far simpler than the forums make it sound. Most of what a small consultancy, agency or IT firm needs to know comes down to three questions: do I have to register, what must my invoice say, and when does e-invoicing kick in.

When you must register

For a service provider, GST registration becomes mandatory once aggregate turnover crosses Rs 20 lakh (Rs 10 lakh in the special-category states). Note the trap: the Rs 40 lakh figure people quote is for suppliers of goods, not services — do not assume it applies to you. Certain situations (some inter-state supplies, e-commerce) can require registration regardless of turnover, so check your specific case.

What a valid tax invoice must contain

Rule 46 of the CGST Rules lists the mandatory fields: your name, address and GSTIN; a consecutive serial number; the date; the customer’s details; the SAC code for your service; a description and value; the taxable value and the rate and amount of CGST/SGST or IGST; the place of supply for inter-state work; whether tax is on reverse charge; and a signature. For services, the invoice must be issued within 30 days of supplying the service.

When e-invoicing applies

E-invoicing — generating an invoice reference number from the government portal — is mandatory once your aggregate turnover crosses Rs 5 crore. Below that, a normal tax invoice is fine. Firms at higher turnovers also face a limited window to report each invoice to the portal, so if you are approaching the threshold, build the workflow before you cross it, not after.

One more, if you pay consultants

If your firm pays other professionals — a designer, a lawyer, a subcontractor — you may have to deduct TDS under Section 194J once payments to one party cross the annual threshold (raised to Rs 50,000 from FY 2025-26), generally at 10%. It is easy to forget the deduction obligation runs the other way too.