Sandipan Mitra is the CEO and co-founder of Pice. He boasts eight years of experience in the B2B and fintech sector. Sandipan's journey includes significant roles at multiple Indian Unicorns Including Product at PayU, and as founding member / VP, Product at Open Financial Technologies.
Non-GST invoices are used when GST isn’t applicable—due to exemptions or non-registration.
They resemble GST invoices but exclude GST fields like tax rate or GSTIN.
Essential elements include seller/buyer info, item details, total amount, and a “No GST” declaration.
They aid in record-keeping, loan applications, and audits, even without tax filing.
Use digital templates or software to simplify invoice generation and avoid manual errors.
When we make invoices under GST, we must adhere to many laws and comply with the requirements. We have mandatory fields in the invoices that must be filled out when invoiced under GST. However, there are some cases where you have to make an invoice without incorporating GST.
In this blog, we will deeply understand the concept of non-GST invoices, learn the step-by-step process of making an invoice without GST, and learn about the components of an invoice template for a non-GST registered business.
Concept of Non-GST Invoices
GST, or Goods and Services Tax, is the imposition of taxes on various products and services. In India, there is a specific rate of GST for every product or service.
In the same way, there are some products that the government do not collect taxes on. These products include food items, education, and healthcare. Even in a small business, you must charge GST on various products. However, you will need a special invoice to create an invoice without GST.
When Should You Use a Non-GST Invoice
You must use these invoices when you sell things that do not require GST. Most of the time, local small businesses use these invoices for transactions where GST does not apply.
Components of a Non-GST Invoice
A non-GST invoice looks similar to a standard GST invoice. However, it does not have a GST section. Here is a list of items that these kinds of invoices contain.
Date and Invoice Number: Every invoice, including a GST invoice, contains a unique invoice number and a date section where the transaction date is mentioned.
Buyer and Seller Information: These sections require the basic information of a seller and a buyer, such as name, address, contact details, etc.
Description of Goods and Services: This section requires information regarding the products or services that are on sale. It includes the item name, quantity and price of the product.
Final Amount: This section requires the end amount a buyer needs to pay after discounts.
Declaration of No GST: Your invoice must clarify that it does not include GST.
Steps To Create A Non-GST Invoice
Here is a step-by-step process to make an invoice without GST.
Step 1: Choose an invoice format with required sections to complete, such as buyer’s and seller’s information, item description, total amount, etc.
Step 2: There is no strict invoice format as it does not contain GST.
Step 3: Give your invoice a unique invoice number.
Step 4: Enter the details under the required sections and mention the date.
Step 5: Once you enter the item description, add the total and deduct discounts if provided.
Step 6: Mention “no-GST”, which means no GST is charged.
Step 7: Do a final check of the invoice details, cross-check your calculation and send the invoice.
Here is an invoice template for a non-GST registered business that will provide you with a basic understanding of these invoices:
Non-GST Invoice
Date:
Unique Invoice Number:
Seller Information
Buyer’s Information
Name:
Name:
Address:
Address:
Phone Number:
Phone Number:
Items
Price
No of Units
Total Price
Item A
₹20
2
₹40
Item B
₹40
3
₹120
Item C
₹30
3
₹90
Final Amount:
₹250
This Invoice does not contain GST
More About a Non-GST Invoice
Let us get a deeper understanding of this type of invoice. We will learn about the importance of these invoices and some tips that you should keep in mind before creating them.
Seller’s Information
When an invoice is issued, the seller provides a copy to the buyer. If any queries or grievances arise, the buyer can easily contact the seller using these details.
Buyer’s Information
While creating and giving the invoice to a buyer, the seller keeps a copy of that invoice with themselves. If they have to contact their buyer for any reason, they can use the customer details to do so. This information is also important to prove the authenticity of that invoice.
Importance of Non-GST Invoices
Although these invoices do not have GST in them, it is essential to have these invoices for the following purposes.
Keeping Records: These invoices do not require GST filings. However, having a record of the basic debit and credit of a business and profit calculation on transactions is essential.
Financial management: Record Keeping is the first step in making a balance sheet or trial balance. These information sheets will help you assess your finances easily.
Eligibility for Loan: Having the past year’s balance sheet and other information makes you eligible for loans. You can use these loans to expand your business.
Clarity: Making it clear to your customers that they are not paying GST on their items helps build trust and loyalty that will pay off in the long run. This will also help you avoid legal issues in future.
Tips To Create a Non-GST Invoice
Here are some tips to ensure you make a perfect invoice.
Keep Copies: Always keep a copy of the invoices that you give to your customers. You will need them for future references, financial management, getting loans, etc.
Cross Check: Once you create an invoice, cross-check your items, quantity, cost, discount and their calculations to eliminate ambiguity.
Prefer Computerised Invoices: Installing a computerised invoicing system will reduce your tasks and provide accurate invoices.
Conclusion
Non-GST invoices do not have GST invoice requirements to fulfil, which eliminates the obligation to follow strict formats or digital systems mandated under GST regulations. This makes them more straightforward and more flexible for small or non-registered businesses.
However, it is still essential to maintain proper records of such invoices for accounting purposes, financial audits, and providing proof of transactions. These invoice templates for a non-GST-registered business also play a key role in expense tracking and tax filing. Typically, companies not registered under GST use these types of invoices. You can easily find and download a non-GST invoice template online to streamline your billing process.
💡If you want to streamline your invoices and make payments via credit or debit card or UPI, consider using the PICE App. Explore the PICE App today and take your business to new heights.
FAQs
What is a non-GST invoice and who should use it?
A non-GST invoice is a billing document used when Goods and Services Tax (GST) is not applicable to a transaction. This includes businesses that are not registered under GST and those dealing in GST-exempt goods or services. It serves as a formal record of sale but does not include tax components like CGST, SGST, or IGST. Non-GST invoices are commonly used by small businesses, freelancers, and local service providers. These invoices help in maintaining financial records and providing proof of transactions.
Is it mandatory to issue an invoice even if GST is not applicable?
Yes, even if GST does not apply to your business, it is important to issue invoices for every sale. Doing so ensures accurate financial documentation, aids in calculating income and expenses, and builds customer trust. It also helps in case of audits, applying for loans, or creating financial statements. The invoice format can be simple, but it must include all relevant transaction details. A note stating "GST not applicable" should also be included.
Can a business use the same invoice format for GST and non-GST transactions?
No, a GST invoice and a non-GST invoice should have different formats. A GST invoice must include GSTIN, tax rate, tax amount, and HSN/SAC codes, which are not required in a non-GST invoice. Non-GST invoices are simpler and do not need to follow the strict layout prescribed under GST rules. Mixing both formats can lead to confusion during audits or tax assessments. Always maintain separate formats for compliance and clarity.
What should I include in a non-GST invoice to ensure it’s complete?
A complete non-GST invoice should include the invoice date, a unique invoice number, seller and buyer details, item descriptions with quantity and price, total payable amount, and a note declaring “This invoice does not contain GST.” While it doesn’t need tax fields, clarity and accuracy are still crucial. It’s also a good practice to mention any discounts applied and retain a copy for record-keeping. Consistency in formatting helps streamline your financial management.
Can I switch from non-GST invoicing to GST invoicing later?
Yes, once your business crosses the mandatory GST registration threshold or voluntarily registers under GST, you must switch to issuing GST-compliant invoices. This includes adding GSTIN, tax rates, and proper tax breakdowns to your invoices. You should maintain a separate invoice series post-registration to avoid overlap. Inform your customers of the change and update your billing systems accordingly. Switching is common as businesses grow or start dealing with taxable supplies.
Sandipan Mitra is the CEO and co-founder of Pice. He boasts eight years of experience in the B2B and fintech sector. Sandipan's journey includes significant roles at multiple Indian Unicorns Including Product at PayU, and as founding member / VP, Product at Open Financial Technologies.
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