GST on Subscriptions: Invoicing Every Renewal Correctly

A subscription renewal is not a repeat of the first invoice. It is a fresh supply, and it needs its own tax invoice.

This is the compliance detail that most often lands back on the merchant as manual work, because international subscription apps produce payment receipts rather than GST invoices — and the two are not the same document.

What a tax invoice has to carry

A compliant GST invoice needs, at minimum:

• Your GSTIN, name and address
• A unique, sequential invoice number — per financial year, unbroken
• Date of issue
• The customer’s name and address, and their GSTIN if they are registered
• HSN/SAC code for what you supplied
• Taxable value, the rate, and the tax amount, split CGST/SGST or IGST
• Place of supply — which decides whether the split is CGST/SGST or IGST

A receipt saying “₹1,499 paid, thank you” carries almost none of that.

The place-of-supply trap

For goods, place of supply is generally where the goods are delivered. For a subscription that is the shipping address — which the subscriber can change between deliveries.

So a subscriber in Karnataka who moves to Maharashtra shifts from CGST+SGST to IGST partway through their subscription. If your invoicing takes the tax treatment from the original order rather than recomputing per delivery, every invoice after the move is wrong.

This is a real failure mode, not a theoretical one, and it is a direct consequence of the fact that subscriptions have a mutable shipping address while one-off orders effectively do not.

Mixed-rate boxes

If you sell a box containing items at different GST rates, the invoice needs the breakdown per item or per rate. A single blended line is not compliant and will not survive scrutiny.

This is worth thinking about at the product design stage, not the invoicing stage. A box deliberately composed of items at a single rate is dramatically simpler to invoice than a curated box whose contents — and therefore whose rate mix — change every month.

Numbering across a subscription

Invoice numbers must be unique and sequential within a financial year. A subscription generating twelve invoices a year across thousands of subscribers generates a lot of numbers, and the sequence must not break or duplicate.

Two things go wrong in practice:

1. Retries create duplicates. A failed charge that is retried and succeeds should produce one invoice, not one per attempt. If your invoice number is allocated at attempt time rather than at success time, you get gaps or duplicates.
2. The financial year rolls over. The sequence resets on 1 April. A system that does not know about the Indian financial year will run a continuous sequence across it.

Credit notes on refunds and cancellations

A mid-cycle refund needs a credit note referencing the original invoice, not a negative invoice or a silent adjustment. Cancellations that trigger a partial refund are the common case here, and they are easy to get wrong when the refund is issued through the gateway dashboard rather than through the system that issued the invoice.

What to ask your subscription app

• Does it generate a tax invoice per renewal, or a receipt?
• Does it recompute place of supply from the current delivery address?
• Does it handle mixed rates within a box?
• Does it allocate invoice numbers on success, not on attempt?
• Does it reset numbering at the Indian financial year?
• Does it issue credit notes on refunds?

Super Subscription produces a GST invoice for every renewal, computed from the delivery address at the time of that delivery, with the per-item rate breakdown.

See it on the Shopify App Store.

Frequently asked questions

Do I need to issue a GST invoice for every subscription renewal?

Yes. Each renewal is a separate supply of goods or services and requires its own tax invoice with the GST breakdown. A payment receipt is not a substitute for a tax invoice.

What GST rate applies to a subscription box?

The rate follows the goods inside the box, not the fact that it is sold as a subscription. A box mixing rates needs the breakdown per item, which is why a single blended line on the invoice is usually wrong.