Digital signature on invoices

What the rule says

Rule 46 of the CGST Rules lists signature or digital signature of the supplier or his authorised representative among the mandatory fields of a tax invoice. A proviso says that a signature or digital signature is not required where the invoice is issued electronically in accordance with the Information Technology Act, 2000. E-invoices carry the Invoice Registration Portal's own digital signature on the signed QR and IRN data. See e-invoicing and IRN.

This is general information, not legal or tax advice.

Four kinds of signature compared

A scanned signature is common and widely accepted in day-to-day trade, but it is not a digital signature in the legal sense. If a dispute reaches court, a DSC-signed PDF is much easier to prove genuine.

How a DSC-signed PDF works

1. The authorised signatory gets a DSC (Class 3 is the class currently issued) from a licensed certifying authority, linked to their PAN and identity.
2. Billing or PDF software signs the invoice file with the private key on the token.
3. When the buyer opens the PDF, the reader shows the signer's name and whether the document was changed after signing.
4. The certificate has a validity, usually one to three years, and must be renewed.

Many businesses already have a DSC for their company's MCA filings or income-tax audits; check whether the same person is authorised to sign invoices.

Who should sign

• The proprietor, a partner, a director or an employee formally authorised in writing.
• Keep a board resolution or authority letter for anyone other than the owner.
• Print the signatory's name and designation below the signature, e.g. For Shree Ganesh Traders, Authorised Signatory.
• Do not let tokens or PINs be shared casually among staff.

When a signatory leaves the business, update the authority letter, retire their DSC from your billing software and inform your bank and regular buyers if their name appeared on documents. An invoice signed after someone has left, in the name of that person, is the kind of loose end that becomes a problem during a dispute or an audit years later.

Worked example: picking a method for your volume

Think about how many invoices you issue and how many go out as PDFs.

Whatever you pick, apply it consistently, so a buyer never receives two styles from you in the same month.

Signatures on other documents

• Credit and debit notes, delivery challans, receipt vouchers: the same signature requirement applies under their respective rules.
• Quotations, proformas, purchase orders: no GST rule, but a signature shows the document is authorised.
• Ledger statements and balance confirmations: a signature from the party confirms the balance for audit.

Safety checklist

1. Never email or WhatsApp a high-resolution image of your signature alone.
2. Lock invoice templates so staff cannot paste signatures on other documents.
3. Keep DSC tokens in safe custody and change PINs when staff leave.
4. Check renewal dates of DSCs in advance.
5. Keep the authority letter for each signatory with your records.

Doing this with Tally and Cashflow OS

Documents created in Cashflow OS, such as quotations, proformas, purchase orders and delivery challans, can include your signature image along with logo, letterhead and bank and UPI details, and are shared as PDFs on WhatsApp or email. Cashflow OS does not apply DSC or e-sign signatures; if you need cryptographic signing, use your DSC software on the final PDF. See also invoice branding, logo and letterhead.