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Tax & Regulatory Compliance Guide

GST & International Tax Invoice Rules for Businesses & Freelancers

Understand tax identification requirements, GST/VAT rates, Section 50 interest penalties, and cross-border billing rules for Indian, US, and EU clients.

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1. Indian GST Invoice Compliance (GSTIN & HSN/SAC Codes)

Under Indian Goods and Services Tax (GST) law, registered businesses issuing tax invoices must include specific mandatory fields:

GSTIN / Tax ID Format

15-digit GST Identification Number (GSTIN) for both supplier and recipient (e.g. 07AAAAA0000A1Z5).

HSN / SAC Code Classification

Services use 6-digit SAC codes (e.g., 998311 for IT consultancy, 998314 for web design).

CGST + SGST vs IGST

Intra-state sales split tax equally into CGST & SGST. Inter-state sales apply full IGST rates (18%).

Section 50 Late Interest Rate

Delayed GST tax liability payments accrue a mandatory statutory interest rate of 18% per annum under Section 50.

2. US Client Invoicing (W-8BEN Forms & EIN/SSN)

When billing United States business clients from outside the US, US tax law requires non-US freelancers to submit a completed Form W-8BEN (Certificate of Foreign Status) to exempt income from 30% US backup withholding tax.

US-based contractors must provide their Employer Identification Number (EIN) or Social Security Number (SSN) via Form W-9.

3. European Union B2B Reverse Charge VAT

For cross-border B2B invoicing within the European Union or to EU clients, include the client's valid VIES VAT number and add the notice: "VAT Reverse Charge Applies — Customer to account for VAT under Article 196 of EU Council Directive 2006/112/EC".